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Study Session 18: Global Investment Performance Standards

Changing colour of pen when writing morning essay


just wondering if anyone has similar cases where a person ends up with very low mark (~0%) for morning essay because he or she used more than 1 colour of pen when writing. 

Meanwhile there is 1 person I know that failed because of that, she specifically checked with the CFA institute and what she has transcribed to me based on the email conversation is her results are not valid given she has switched between blue and black pens for some questions.

Some GIPS questions

1: internal dispersion has to be for all the reporting periods. External dispersion has to be annually for all years after 2011. Is my understanding correct?

GIPS-Portfolio Valuation

Based on CAFI item sets, there was a statement that is supposed to be correct but I’m a bit confused.

“Portfolios must be valued in accordance with the definition of fair value, not cost or book values. In fact, fair value supersedes market value”

If the above is correct why is portfolio valuation must be based on market value?

MWR and Cash contributions

Why would MWR can have upward (downward) bias relative to the TWR when large contributions are made just prior to a period of strong (weak) performance?

what are the other factors/scenarios that would make the MWR upward biased relative to the TWR.

MWR advantages

Why would MWR  be deemed preferable if the portfolio manager can choose the timing of capital contributions and what are the other advantages of MWR over TWR?


Why would TWR is considered a better measurement than MWR for evaluating the external advisor’s investment performance?


I’m tearing my hair out over GIPS. This reading goes on and on and on. I’ve been reading it in the mornings before work for what feels like 2 weeks. Then there’s 50 odd EOC’s and a plethora of calculation questions (TVPI, modified Dietz, etc.). Not that they’re overly difficult, but I spent zero time on GIPS calculations because I didn’t see “calculate” in any of the LOS’s.

Anyone else punt these calculations or should I suck it up and learn them? There’s enough other material in this section to fill an entire AM exam. 100 pages of pure text. Blah.