bmaggie

Which of the following best describes the underlying principles upon which the Global Investment Performance Standards (GIPS) are based?

A) Full disclosure and fair representation of performance results.

B) Fair and consistent application of a global set of regulatory requirements.

C) Uniformity and consistent application of standards for the global regulation of the securities industry.

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The GIPS standards are a set of voluntary standards based on the fundamental principles of full disclosure and fair representation of performance results.

bmaggie

Which of the following statements regarding CFA Institute Global Investment Performance Standards (GIPS) is TRUE? A firm that employs members of CFA Institute:

A) is not required to conform to the GIPS.

B) must choose to comply with either the Performance Presentation Standards (PPS) or GIPS.

C) must comply with the GIPS only within the United States.

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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.

bmaggie

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.

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The GIPS were created to address the portability of investment results, varying time periods, and survivorship biases. Insider trading was not an issue.

bmaggie

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) required by the Code of Conduct.

C) the best way to comply with Standard V(B), Performance Presentation.

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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.