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

RELATED FAQS

  1. A person whose registration has been revoked by an Administrator due to a felony ...

    The correct answer is a. The Administrator may suspend, deny or revoke registration in any capacity if the person has such ...
  2. Which of the following, under the NASD Conduct Rules, would constitute a complaint ...

    The correct answer is b. The NASD defines a “complaint” as adverse communications that are in writing. Choices I and III ...
  3. An investor has bought 25 call options on oil. The exercise price of the call is ...

    The correct answer is: a) Rule for a long call position: If at expiry, the asset price settles below the expiry price, Do ...
  4. Under the Investment Company Act of 1940, which of the following is not a formal ...

    The correct answer is d. A mutual fund is technically registered under the ’40 Act as an open-end management investment company. ...
RELATED TERMS
  1. No results found.
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center