All of the following are reasons why the Global Investment Performance Standards (GIPS) are necessary EXCEPT enhancing:
A) competition in global markets. B) market efficiency. C) investor confidence.
B
Correct. The answer is B.
I was thinking if the standardized presentation will promote the efficiency. Maybe it should not be called market efficiency.
GIPS Objectives (from Kaplan)
• Establish global, industry-wide best practices for the calculation and presentation of investment performance, so that performance presentations for GIPS-compliant firms can be compared regardless of their country location. • Facilitate the accurate and unambiguous presentation of investment performance results to current and prospective clients. • Facilitate a comparison of the historical performance of investment management firms so that clients can make educated decisions when hiring new managers. • Encourage full disclosure and fair global competition without barriers to entry. • Encourage self-regulation.
market efficiency refers more to arbitrage opportunities I would say… which has nothing to do with gips.