CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

According to the Global Investment Performance Standards (GIPS), when dealing with compliance, which of the following statements are correct?

I. Independent third parties may not be used to enhance firms' performance measurement activities.
II. Independent third parties may assist with performance measurement and composite construction.
III. Software suppliers can assist managers in complying with the GIPS but they themselves cannot claim compliance to the GIPS.
Correct Answer: II and III

Independent third parties may be used to enhance firms' performance measurement activities. This will involve using independent third parties to assist with performance measurement and composite construction.

Software suppliers can assist managers in complying with the GIPS but they themselves cannot claim compliance to the GIPS (they are not firms).

User Contributed Comments 5

User Comment
Khadria Why "Software Suppliers" are not firms?
nike they are not THE Firms defined in the GIPS.
studyprep Software suppliers are firms, by virtue. But here we are talking about Financial firms that provide Financial instruments (e.g. mutual funds and so on) for the investors and who wants to claim compliance of the GIPS.
AUAU Here 'firm' refers investment firm not suppliers firm that make no investment decision but only assist in presenting the results.
johntan1979 Note the word "assist", not control.
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