tycoon

Under the Global Investment Performance Standards (GIPS), for periods beginning January 1, 2001, portfolio valuation must be based on:

A) market values and must occur at least monthly.

B) cost basis and they must occur at least monthly.

C) book values and they must occur at least monthly.

D) market values and they must occur at least quarterly.

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Answer and Explanation

GIPS require portfolio valuation to be based on market values and valuation must occur at least monthly for periods beginning January 1, 2001. For periods beginning January 1, 2010, firms must value portfolios on the date of all large external cash flows.

GIPS require portfolio valuation to be based on market values and valuation must occur at least monthly for periods beginning January 1, 2001. For periods beginning January 1, 2010, firms must value portfolios on the date of all large external cash flows.

tycoon

Which of the following is an important requirement of Global Investment Performance Standards (GIPS)?

A) Benchmarks and composites should be created on an ex post basis.

B) All of these choices are correct.

C) Time-weighted rates of return that adjust for daily-weighted cash flows must be used beginning January 1, 2003.

D) Firms need to comply with the local laws of regulation, which supersede GIPS.

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Answer and Explanation

Benchmarks and composites should be created on an ex ante basis. Time-weighted rates of return that adjust for daily-weighted cash flows must be used beginning January 1, 2005.