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Reading 4 – GIPS questions with accurate answers.
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Reading 4 – GIPS questions with accurate answers.
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Reading 4 – GIPS questions withaccurate answers.
#1 ANS -All of the following are titles of one of the nine sections of the Global Investment Performance
Standards (GIPS) EXCEPT:
A) Input Data.
B) Real Estate.
C) Implementation.
"Implementation" is not a name of one of the nine major sections of the GIPS standards.
C
#2 ANS -he nine major sections of the Global Investment Performance Standards (GIPS) least likely
include:
A) required disclosures.
B) verification procedures.
C) input data requirements.
The nine major sections of GIPS are: 0) Fundamentals of compliance; 1) Input data; 2) Calculation
methodology; 3) Composite construction; 4) Disclosures; 5) Presentation and reporting; 6) Real estate;
7) Private equity; 8) Wrap fee/Separately Managed Account (SMA) portfolios.
, B
#3 ANS -The El Rey Investment Company, located in Barcelona, Spain, is in the process of adopting the
Global Investment Performance Standards (GIPS) for the current fiscal year. One of the GIPS standards is
in direct conflict with Spanish investment reporting regulations. In order to be in full compliance with
GIPS, El Rey must:
A) comply with the local regulation and make full disclosure of the conflict.
B) choose either the GIPS standard or the local regulation, whichever is the more conservative approach,
and make full disclosure of the conflict.
C) comply with the GIPS standard and make full disclosure of the conflict.
A GIPS requirement is that firms comply with the local law and make full disclosure of the conflict.
A
#4 ANS -Which of the following statements regarding Global Investment Performance Standards (GIPS)
is most accurate?
A) GIPS exists as a best or maximum worldwide standard where local or country specific law for
investment performance measurement does not exist.
B) GIPS requires that all fee-paying discretionary portfolios be included in composites defined according
to investment objective or similar strategy and firms must show GIPS compliant history for a minimum
of five years or since inception if a composite has existed less than five years.
C) GIPS is intended to foster the notion of a world-wide regulatory body to oversee investment
performance and measurement on a global scale.
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