CFA Practice Question
Marcus Investments has included simulated portfolios in their performance presentation based on past data. Marcus
A. is in compliance with the Code and Standards.
B. has violated Standard III D - Performance Presentation.
C. has violated Standard I (C) - Misrepresentation.
Explanation: Simulated model portfolio performance cannot be linked to actual performance. However, it can be presented separately or mentioned as supplementary information.
User Contributed Comments 6
| User | Comment |
|---|---|
| dimanyc | Although I chose B, nowhere in the text does it say that he mixed simulated results with the real results... |
| whipp | "past data" implies the use of actual investment results |
| StanleyMo | i guess simulated portfolio is confusing customer, you can fake a return 300% per year with simulated portfolio. |
| amitsinha | I thought of choosing B but choosed A because nowhere it states he has not disclosed performance is simulated |
| Mikehuynh | Simulated must be based on future data as what i know |
| GBolt93 | Don't think disclosure is enough. Think as long as you present them together it's a violation. How would you simulate on future data? I think simulated means they created a new strategy, back tested it and presented that. |