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标题: Ethical and Professional Standards 【Reading 3】Sample [打印本页]
作者: LiquidAssets10    时间: 2012-3-20 14:05     标题: [2012 L1] Ethical and Professional Standards 【Session 1 - Reading 3】Sample

The Global Investment Performance Standards (GIPS) were designed to apply primarily to which of the following groups?
A)
Investment management firms located in countries without locally accepted investment standards already in place.
B)
Investment firms located in the 21 countries that have contributed significantly to promoting and developing the GIPS.
C)
Investment management firms located worldwide that seek to comprehensively and accurately present historical investment performance.


The GIPS were designed to become “the” worldwide standard for all investment firms seeking to present historical investment performance.
作者: LiquidAssets10    时间: 2012-3-20 14:05

The Global Investment Performance Standards (GIPS) apply to which of the following parties?
A)
A software firm that developed a software package that assists investment firms in achieving GIPS compliance.
B)
The chief compliance officer for a regional money manager.
C)
An investment management firm located in Indonesia.


Only an investment firm that actually manages assets can claim compliance with GIPS.
作者: LiquidAssets10    时间: 2012-3-20 14:06

The Investment Performance Council (IPC) is composed of 36 members from 15 countries and serves as the global committee responsible for the Global Investment Performance Standards (GIPS). The principal goal of the IPC is to have:
A)
all countries worldwide adopt the GIPS standards as the standard for investment firms presenting historical performance.
B)
all countries with developed financial markets adopt the GIPS standards as the standard for investment firms presenting historical performance and become members of the IPC.
C)
all firms in the IPC-represented countries adopt the GIPS standards as the standard for investment firms presenting historical performance.


The IPC envisions the GIPS compliance as a “passport” that allows firms to enter the investment arena, which will level the playing field on a global basis.
作者: LiquidAssets10    时间: 2012-3-20 14:06

Compliance with the CFA Institute Performance Presentation Standards (PPS) or the Global Investment Performance Standards (GIPS) is:
A)
the only way to comply with Standard V(B), Performance Presentation.
B)
the best way to comply with Standard V(B), Performance Presentation.
C)
required by the Code of Conduct.


According to the Standards of Practice Handbook, complying with the PPS and GIPS is the best way to comply with Standard V(B). However, a firm is not required to be in compliance with either PPS or GIPS in order to claim compliance with Standard V(B). Compliance with the PPS or GIPS is neither required by the Code and Standards nor the SEC.
作者: LiquidAssets10    时间: 2012-3-20 14:06

Which of the following statements most accurately describes why the Global Investment Performance Standards (GIPS) were created? To:
A)
meet the need for a single globally accepted set of regulatory guidelines among developed securities markets.
B)
provide comparability of performance results among nations for which no presentation guidelines currently exist.
C)
meet the need for a single globally accepted set of investment performance presentation standards.


Recognizing the need for one globally accepted set of investment performance presentation standards, CFA Institute sponsored and funded the Global Investment Performance Standards Committee to develop and publish a single global standard by which all firms in all countries calculate and present performance to clients and prospective clients.
作者: LiquidAssets10    时间: 2012-3-20 14:07

Which of the following best describes the underlying principles upon which the Global Investment Performance Standards (GIPS) are based?
A)
Fair and consistent application of a global set of regulatory requirements.
B)
Uniformity and consistent application of standards for the global regulation of the securities industry.
C)
Full disclosure and fair representation of performance results.


The GIPS standards are a set of voluntary standards based on the fundamental principles of full disclosure and fair representation of performance results.
作者: LiquidAssets10    时间: 2012-3-20 14:07

Which of the following statements regarding CFA Institute Global Investment Performance Standards (GIPS) is CORRECT? A firm that employs members of CFA Institute:
A)
must choose to comply with either the Performance Presentation Standards (PPS) or GIPS.
B)
must comply with the GIPS only within the United States.
C)
is not required to conform to the GIPS.


No firm is required to comply with either PPS or GIPS. These are CFA Institute guidelines, and a firm can choose to conform to one or both.
作者: LiquidAssets10    时间: 2012-3-20 14:07

In 1995, the CFA Institute sponsored and funded the Global Investment Performance Standards (GIPS) in response to:
A)
a need to address issues, such as portability of investment results.
B)
an increase in insider trading.
C)
both of the reasons listed here.


The GIPS were created to address the portability of investment results, varying time periods, and survivorship biases. Insider trading was not an issue.
作者: LiquidAssets10    时间: 2012-3-20 14:08

Which of the following statements regarding the Global Investment Performance Standards (GIPS) is CORRECT? The GIPS standards:
A)
represent the highest performance measurement and presentation practice worldwide.
B)
are considered to be the minimum global standard for historical performance presentation.
C)
are designed to supplement local standards of historical performance presentation in countries around the world.


GIPS are envisioned as being “the” standard worldwide, and would eliminate the need for separate local standards. The CVG approach is currently utilized, but the goal is to converge all standards globally and eliminate the need for CVGs.
作者: LiquidAssets10    时间: 2012-3-20 14:08

As countries adopt the Global Investment Performance Standards (GIPS), which of the following is least likely to occur?
A)
Existing and potential clients will be able to make fair and unambiguous comparisons among investment firms.
B)
Competition in the global investment industry will be enhanced.
C)
The trend toward cross border investments will decline.


There is no reason to expect the level of international investing to decline as a result of the adoption of a global set of performance standards. If anything, international investing will become more attractive as the credibility of reported performance results improves.
作者: JustasS    时间: 2012-3-20 14:19

Advisors, Inc., is in the process of adopting the Global Investment Performance Standards (GIPS). The managers of the firm are combining the results of fee-paying discretionary portfolios into composites for reporting purposes. For purpose of comparison, each fee-paying discretionary portfolio must be included in at least:
A)
two composites.
B)
three composites.
C)
one composite.


A composite is a group of portfolios with similar investment strategies and objectives. The grouping is done so a comparison can be done between the portfolios in each composite. A portfolio must be included in at least one composite for compliance with the GIPS.
作者: JustasS    时间: 2012-3-20 14:19

McGregor Investment Management promotes itself as a fixed-income investment management firm. The vast majority of the portfolios it manages are fixed-income portfolios. McGregor does, however, manage a few portfolios, utilizing a growth equity investment strategy, but the firm has no intention of ever promoting this strategy. Under the Global Investment Performance Standards (GIPS), must these portfolios be included in a composite?
A)
Yes, because the portfolios are discretionary and fee paying.
B)
No, because the firm does not normally manage portfolios to a growth equity strategy and is not planning to promote it.
C)
Yes, because the portfolios are managed to a widely recognized investment strategy.




The GIPS Standards require that all actual fee-paying discretionary portfolios are included in at least one composite. It does not matter if the firm ever plans to promote the particular strategy to which a portfolio is being managed, if the portfolio is fee-paying and discretionary, it must be included in at least one composite. Thus, McGregor must include the growth equity portfolios in at least one of its composites.
作者: JustasS    时间: 2012-3-20 14:20

Viroqua DeSoto, CFA, is reading a discussion in an online forum about the construction and purpose of composites in performance reporting. She finds these statements from participants:
Statement 1: The purpose of composites is to let investors know how well a firm has performed managing different types of securities or investment strategies.
Statement 2: A managed portfolio should have a performance history of at least one year before the firm assigns it to a composite.
With respect to both statements:
A)
only one is correct.
B)
both are correct.
C)
both are incorrect.


DeSoto should agree with Statement 1 but disagree with Statement 2. Reporting on the performance of composites gives clients and prospects information about the firm’s success in managing various types of securities or investment styles. The firm should identify which composite each managed portfolio will be included in before the portfolio’s performance is known, to prevent the firm from including portfolios selectively and artificially creating composites with superior returns.
作者: JustasS    时间: 2012-3-20 14:20

Jones, Inc., is attempting to qualify for Global Investment Performance Standards (GIPS) compliance. Regarding mandatory disclosures, which of the following disclosures will be insufficient and thus prevent Jones, Inc., from claiming compliance?
A)
Jones' definition of the firm is that they are a brokerage/portfolio management firm registered with the Securities and Exchange Commission (SEC).
B)
Jones discloses all firm assets under active management each period.
C)
Jones discloses all non-fee paying portfolios that are included in composites and notes the percentage of composite assets that are non-fee paying portfolios.


Jones must disclose total firm assets each period, not assets under active management. The definition of the firm, the disclosure of the firm’s composites, and the disclosure regarding non-fee paying portfolios are all appropriate.
作者: JustasS    时间: 2012-3-20 14:23

When verifying a firm’s compliance with Global Performance Investment Standards (GIPS), the verifier must:
A)
attest that the firm’s processes and procedures are established to present performance in accordance with GIPS requirements.
B)
disclose whether the verification was performed by the firm’s internal auditors or a third party.
C)
clearly identify the composites for which verification has been performed.


The verifier must attest that the firm has complied with all GIPS requirements for composite construction on a firm-wide basis and that the firm’s processes and procedures are established to present performance in accordance with the calculation methodology, data, and format requirements of GIPS. Verification is not a GIPS requirement. If performed, verification applies to the firm as a whole, not to individual composites, and must be performed by an independent third party, not the firm itself.
作者: JustasS    时间: 2012-3-20 14:23

Which of the following statements most accurately describes verification under the Global Investment Performance Standards (GIPS)? GIPS verification:
A)
is required for a firm to claim GIPS compliance.
B)
requires a verification report to be issued for the entire firm.
C)
requires verification of individual composites.


A single verification report is issued with respect to the entire firm; GIPS verification cannot be carried out for a single composite.



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