Q:
Which of the following statements is (are) true with respect to the key characteristics of the Global Investment Presentation Standards?
I. Should these Standards be more strict than local laws, yet they are in conflict with each other, then the managers must report two sets of performance presentation figures.
II. A fee paying discretionary portfolio may only be accounted for in one composite.
III. Non-discretionary portfolios should not be included in any of the composites.
IV. Countries without established performance presentation standards, may incorporate Global Investment Presentation Standards into their system by way of creating a "Country Version" of Global Investment Presentation Standards.
a) III only.
b) I and IV only.
c) I, II, and III only.
d) I, II, and IV only.
A:
The correct answer is: a)
(I) is incorrect. The rule is that if the Standards are more strict than local laws, yet they are in conflict with each other, then the managers must adhere to the local laws. However, they must simultaneously disclose this conflict in their presentation.
(II) is incorrect. It is possible for a fee paying discretionary portfolio to be accounted for in more than one composite.
(III) is true. The reason why non-discretionary portfolios should not be included in any of the composites, is because the managers did not have full and direct control in the investment decisions that were made for these portfolios.
(IV) is incorrect. Countries without established performance presentation standards, may incorporate Global Investment Presentation Standards into their system by way of creating a "Translation of Global Investment Presentation Standards. The "Country Version of Global Investment Presentation Standards" is for those countries that already have presentation standards in place.2005
LOS: 1.5.c

MORE FAQS

  1. Which of the following statements is (are) true with respect to the factors that a manager must take ...

  2. Which of the following statements is (are) true with respect to setting the proper constraints in managing ...

  3. A margin account has a long market value of $12,000, a debit balance of -$6,000 ...

  4. Which of the following signatures are required on a client’s new account form ...

  5. Under the Uniform Securities Act, registration with the Administrator as an investment adviser is required ...

  6. Which of the following are not types of open-end management investment companies ...

  7. What two components are used to calculate risk-adjusted return? I ...

  8. Which of the following are tools that are employed by the Federal Reserve in its efforts to control the money supply?

  9. Under the Uniform Securities Act, which of the following are defined as securities ...

  10. Which of the following statements is (are) true with respect to price-earnings (P/E) multiples ...

  11. Which of the following strategies is (are) appropriate? I. If a borrower has a fixed rate debt and is ...

  12. Federal covered securities are subject to which of the following requirements ...

  13. If a sales representative moves from one broker-dealer to another ...

  14. Which of the following deliveries for a 600 share order, broker-dealer to broker-dealer ...

  15. Under a pegged exchange rate system which of the following measures can be undertaken by a home country ...

  16. How many attempts at each CFA exam is a candidate permitted?

  17. Do financial advisors need to pass the Series 7 exam?

  18. Do financial advisors need to be approved by FINRA?

  19. How does a broker decide which customers are eligible to open a margin account?

  20. Why is the Nasdaq more heavily weighted to tech stocks than other stock exchanges?

RELATED FAQS

  1. Which of the following statements is (are) true with respect to the factors that ...

    The correct answer is: d) (I) is incorrect because if interest rates are expected to rise, banks will generally "increase" ...
  2. Which of the following statements is (are) true with respect to setting the proper ...

    The correct answer is: d) Choice II is incorrect because the longer the investment horizon, the less emphasis must be placed ...
  3. A margin account has a long market value of $12,000, a debit balance of -$6,000 ...

    The correct answer is a. I is correct since the stock's currently valued at $12,000 are increasing 20% or $2,400. II is incorrect ...
  4. Which of the following signatures are required on a client’s new account form ... ...

    The correct answer is B. While local practices of a broker-dealer might require the client to sign the form, even when opening ...
  5. Under the Uniform Securities Act, registration with the Administrator as an investment ...

    The correct answer is c. I is incorrect, since broker-dealers or their agents who don’t receive a fee for making investment ...
  6. Which of the following are not types of open-end management investment companies ...

    The correct answer is d) Hedge funds are extremely aggressive entities that engage in margin and short-selling.  They are ...
RELATED TERMS
  1. International Accounting Standards - IAS

    An older set of standards stating how particular types of transactions ...
  2. NASDAQ Global Market Composite

    An index made up of stocks that represent the Nasdaq Global Market. ...
  3. Global Investment Performance Standards - GIPS

    Ethical standards to be used by investment managers for creating ...
  4. Exposure Draft

    A document released by the Financial Accounting Standards Board ...
  5. Government Accounting Standards Board - GASB

    An organization whose main purpose is to improve and create accounting ...
  6. Standardization

    A framework of agreements to which all relevant parties in an ...
Trading Center