- CFA Exams
- CFA Exam: Level I 2021
- Study Session 1. Ethical and Professional Standards
- Reading 5. Global Investment Performance Standards (GIPS)
- Subject 2. The Scope of GIPS Standards with Respect to Definition of the Firm, Historical Performance Record, and Compliance
CFA Practice Question
There are 361 practice questions for this study session.
CFA Practice Question
After two years of claiming compliance, a firm has to present a ______-year performance record.
Correct Answer: B
A firm must add an additional year of compliant performance results each year until it reaches ten years of results.
User Contributed Comments 10
|smillis||Why not 2 years? I know I shouldn't assume inception started two years ago, but that is the way I read it...why wouldn't the firm have claimed 7 years of compliance if it has to show a seven year performance record?|
|sradis||In order to initially claim compliance, 5 years of history must be presented. Since compliance has been claimed for two years, each subsequent year must be reported (giving you 7 years).|
|studyprep||7 years is correct.
By default it is initial# 5 + (on top of initial number)2=7
(Exception: it could be 2...Do not go for exception, unless it is hinted out.)
|viannie||To comply, start with 5 years of historical compliant performance (or since the inception of the firm) + 2 years (since already in compliance for 2 yers) ... start 5 years or since inception + increase up to 10 years of compliance subsequently. 10 years in record eventually|
|Kami02||I don't get it: after 2 years means that it's already 7 years...of records completed then firms has to report only 3 years!??|
|johntan1979||Don't get this question as well... 2 + 7 is only 9, not 10.
And there is no way of knowing if this is a new company or an established one with at least 7 years in existence.
I don't think the question is very clear. Does it want how many years already presented or how many more to go? And based on my previous explanation, there is NO WAY you can tell how many years already presented. Too many possibilities. Minimum is 5 years, but can be less for new companies, and can be more for old companies.
From the explanation given in the answer, seems that the question is leaning towards how many more years to go, assuming a brand new company.
Whatever... too confusing to waste too much time.
|anniekhan1||so basically its the initial 5 year minimum plus the 2 years of claimed compliance which equals 7|
|gerdvar||Could the answer also be two? Supposing a) 2 was in the answer bank and b)the firms starte operations two years ago (therefore complying from day 1)?|
|660908||I don't get this question, 2 years claiming compliance, 8 more to make it to 10 years ?|
|shalie||The firm has to start with 5 years. I already has 5 years under it's belt.|