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

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