- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 4. Introduction to the Global Investment Performance Standards (GIPS)
- Subject 2. The Key Concepts of the GIPS Standards
CFA Practice Question
GIPS standards require that ______
II. unrealized gains should not be used in the calculation of portfolio returns.
III. actual trading expenses should be deduced when calculating returns.
I. portfolio valuations must be based on book values.
II. unrealized gains should not be used in the calculation of portfolio returns.
III. actual trading expenses should be deduced when calculating returns.
Correct Answer: III only
II. Total returns, which include realized and unrealized gains and losses plus income, should be used in the calculation of portfolio returns.
III. Actual, not estimated, trading expenses should be deducted when calculating returns.
I. Portfolio valuations should be based on market values.
II. Total returns, which include realized and unrealized gains and losses plus income, should be used in the calculation of portfolio returns.
III. Actual, not estimated, trading expenses should be deducted when calculating returns.
User Contributed Comments 2
| User | Comment |
|---|---|
| omya | portfolio valuations should be based on market values. realised n unrealised loss n gains both should be included. only actual trading expenses should be deducted. |
| tybe0012 | the reduction of trading expenses provides a clearer picture of the actual performance of a portfolio |