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LOS d: Identify and explain potential data quality issues as they relate to calculating rates of return.
Q1. Frank Belanger would like to calculate the rate of return for an illiquid asset. He states that he will use matrix pricing to obtain a substitute for the security’s current price. Which of the following most accurately describes matrix pricing? In matrix pricing, the analyst uses:
A) the price from the last trade for the same security.
B) dealer quotes for similar securities.
C) an average of recent prices.
Q2. Which of the following would NOT be regarded to be a problem relating to the quality of data used in calculating rates of return?
A) Matrix pricing is used for some fixed income securities.
B) Account valuations include trade date accounting.
C) When accounts contain illiquid assets, estimates or guesses are used in the calculation.
Q3. Accounts that contain illiquid assets present additional problems of accurately measuring return. Which of the following statements would NOT be regarded as a problem associated directly with illiquid assets?
A) Matrix pricing is used.
B) Account valuations use trade date accounting as opposed to settlement accounting.
C) Assets are carried at the price of the last trade. | 
发表于 2009-4-10 13:29
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