1215

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.

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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.

1215

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.