CFA Practice Question
Pratt and Mickey manages institutional portfolios. It calculates its portfolio returns quarterly and only includes realized capital gains. Pratt and Mickey is
A. not GIPS compliant because the frequency of return calculation does not conform to GIPS and exclusion of unrealized capital gains violates GIPS.
B. not GIPS compliant because exclusion of unrealized capital gains violates GIPS.
C. is GIPS compliant.
Explanation: In order to be GIPS compliant, monthly portfolio returns should be calculated after January 1, 2001, and both realized as well as unrealized capital gains should be included.
User Contributed Comments 4
| User | Comment |
|---|---|
| mishis | Was "january 1 2001" when GIPS compliance was initiated? |
| dan1987 | There is no mention of a date in the question surely it is reasonable to assume that he is reporting the most recent returns and since GIPS requires monthly and this dude is computing quarterly it is not compliant. |
| mary11 | lol |
| Procbaby1 | B is partially correct? |