Hi guys - a couple of ethics inconsitencies here. 1. On schweser mocks volume 1 there are two contradicting questions re: GIPS. One states you have to include both fee paying and non fee paying portfolios. The other says that only fee paying portfolios should be included and that non-fee paying are “not required”. 2. Stardard I D - Misconduct. Here also, two examples a. portfolio manager goes out with client, gets drunk etc but there´s no breach of the standard because he is not in a “professional environment”. b. pm has to sit an MBA exam and sneaks some notes into the exam but DOES NOT use them. Result: breach of CFA conduct standard (for cheating even if not in CFA exam) AND breach of MISCONDUCT because it is prohibits “lying cheating stealng or any dishonest conduct that reflects adversely on a member’s professional reputation” (but still, he’s out of his “professional environment”…this is an MBA exam) Any help please!? Thanks!
Without the actual questions I am not much help, especially on number 1. Number 2 is one of those grey areas, but I would wager a guess that the MBA exam is considered a professional advancement of knowledge and thus can be tied to the candidates professional activities. This is a stretch, and without the context of the question I’m not much help.
Here is the first one! (I´ll look for the other one cos I did it a while ago) GIPS Question 1. In calculating total firm assets for a GIPS compliant performance statement, Allen Budy, CFA finds that there is a mix of fee payign and non fee paying accounts some of which are discretionary and some of chich are non discretionary accounts. Should Budy include non discretionary accounts and non fee paying accounts in the calculation of total firm assets? Non - discretionary Non-fee paying a. Yes yes b. No yes c. No yes Answer is A: Total firm assets must include all accounts whether discretionary or not and whether fee paying or not. 2.Compliance with the Global Investment Performance Standards least likely requires firms to: a. include all fee paying and non fee paying accounts in at least one composite b.document in writing the policies and procedures used to comply iwth GIPS C.specifically define what constitutes the firm that is claiming compliance Answer is A: All fee-paying discretionary accounts must be included in composites, but including non fee-paying accounts is not required.
the difference is between “Total Firm” and “Composite” first question asks for Total Firm assets so included everything, fee paying and non fee paying, discretionary and non discretionary. Second question asks for Composite which must include fee paying accounts.
gauri Wrote: ------------------------------------------------------- > the difference is between “Total Firm” and > “Composite” > > first question asks for Total Firm assets so > included everything, fee paying and non fee > paying, discretionary and non discretionary. > > Second question asks for Composite which must > include fee paying accounts. That what I was assuming when I asked…good explanation. Keeping this straight in your head will save you from giving up free marks on exam day.
thanks! that makes sense