CFA Practice Question
Which one of the following is incorrect with respect to GIPS?
A. A composite is an aggregation of individual portfolios representing a similar investment mandate, objective or strategy and is the primary vehicle for presenting performance to prospective clients.
B. Total firm assets should include non-fee-paying assets under management.
C. Non-fee-paying portfolios may not be included in the firm's composites.
Explanation: Non-fee-paying portfolios may be included in the firm's composites; however, firms are required to disclose the percentage of composite assets represented by non-fee-paying portfolios as of the end of each annual period.
User Contributed Comments 3
| User | Comment |
|---|---|
| Clude | It is NON-DISCRETIONARY accounts that need not to be included in a comp. |
| lynserious | tell me the difference of may be and may not be, that's the same sht. I choose B |
| Xuengzilam | Non-fee-paying account could be include in GIPS but must disclose % while non-discretionary account no need to include in GIPS and no need to disclose. @Iynserious. |