Reading 4: Global Investment Performance Standards (GIPS)-LOS 2011, Investment, definition, investment, standards

1215

Session 1: Ethical and Professional Standards
Reading 4: Global Investment Performance Standards (GIPS)

LOS b: Describe the scope of the GIPS standards with respect to an investment firm's definition and historical performance record.

 

 

With respect to reporting investment results, Global Investment Performance Standards (GIPS) require a minimum of:

A) ten years of historical performance.

B) three years of historical performance.

C) five years of historical performance.

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GIPS require a minimum of five years of conforming historical performance results.

[此贴子已经被作者于2011-2-27 14:39:14编辑过]

luqian55

thanks a lot

1215

Which of the following is NOT an important characteristic of how a firm defines itself? The firm definition establishes the:

A) entity to which local securities laws apply when they exceed the GIPS requirements.

B) boundaries for what is included when measuring the total firm's assets.

C) set of portfolios that must be included in at least one of a firm's composites.

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When a firm claims compliance with GIPS, it must be compliant on a firm-wide basis. The definition of the “firm” under the GIPS standards establishes the boundaries for what constitutes firm assets, and the set of portfolios that must be included in at least one composite.

1215

Assume that on January 1, 2005, a firm with no Global Investment Performance Standards (GIPS) compliant history since its inception four years ago wishes to claim compliance with GIPS. Which of the following accurately reflects the appropriate action for the firm to take?

A) Comply with GIPS for the year beginning January 1, 2002, and report its performance prior to this date with a disclosure of why the earlier years are not GIPS compliant.

B) Nothing, a firm must have five years of compliant performance history to claim compliance with GIPS.

C) Comply with GIPS for all four periods since the firm's inception.

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In order to claim GIPS compliance, a firm must present at least five years of annual investment performance that is compliant with GIPS. If a firm or composite is less than five years old, the performance since the inception of the firm or composite must be presented.

1215

Which of the following was NOT a motivation for creating the Global Investment Performance Standards (GIPS)?

A) Achieve greater uniformity and comparability among presentations of performance.

B) Increase the role of government agencies in the investment industry.

C) Improve the service offered to investment management clients.

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All of these were motivations for creating GIPS except to increase the role of government. In fact, these standards have been created to bolster the notion of self-regulation and reduce the encroachment of government into the investment industry.