CFA Practice Question

CFA Practice Question

Mason and Mason (M&M) are a bond management firm. They report their portfolio returns after including accrued interest and their asset weights are based on full prices.
A. M&M is fully GIPS compliant.
B. M&M is not GIPS compliant because asset weights should be based on market values.
C. M&M is not GIPS compliant because asset weights should be based on market value and accrued interest should not be included in return calculations.
Explanation: M&M is GIPS compliant because accrued interest should be included in return calculations, and full price, i.e., market price plus accrued interest, should be used for asset weights.

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