The answer is B. Why answer C is inaccurate? The solution says that terminated portfolios must be included in the historical record of the appropriate composite(s) through the last full measurement period that the portfolio was under management. This requirement prevents the inclusion of the performance of a terminated portfolio for partial periods in a composite’s return.
Say the portfolio is terminated this year on March 31, isn’t that the return of terminate portfolio for this year be counted in composite till 31 March 2014 only? Thanks
To be honest I think this is just a poorly written question. The requirement is to include accounts in the composite through the last measurement period that the account was discretionary and managed to the strategy. At this point the portfolio would come out of the composite but the history would remain (to prevent survivorship bias). In your example, it would depend on when the portfolio terminated on the 31. If they terminated anytime during the market hours then the account would be removed for the entire month. If they terminated after trading hours then it would stay in the composite for the whole month.