Chapter 4 - Ethics

Which of the following statements regarding GIPS compliance is correct? A) Plan sponsors and consultants that manage assets can claim compliance with GIPS. B) Software that calculates performance in a manner consistent with the GIPS standards can claim compliance with GIPS. C) Investment management firms can comply with GIPS requirements by investing their compliance claims to the standards they have chosen to follow.

A) Plan sponsors and consultants that manage assets can claim compliance with GIPS.

An investment management firm that does not adopt the GIPS standards could mischaracterize its overall performance by presenting a performance history: A) that includes terminated portfolios. B) composed of a single top-performing portfolio. C) for an investment mandate over all periods since the firm's inception.

B) composed of a single top-performing portfolio.

Verification of a firm's compliance with the GIPS standards is performed: A) by firm personnel. B) on a firm-wide basis. C) to ensure the accuracy of a specific composite presentation.

B) on a firm-wide basis.

Each composite of a GIPS-compliant firm must consist of: A) multiple portfolios. B) portfolios selected on an ex post basis. C) portfolios managed according to a similar investment strategy.

C) portfolios managed according to a similar investment strategy.