A composite contains portfolios A, B, C and D that had returns during the year of 3.8 percent, -4.6 percent, 16.1 percent and 7.4 percent respectively. Which of the following statements best describes the provisions of GIPS with respect to measures of dispersion? A) The standard deviation is the most appropriate measure, but the firm should disclose whether the denominator in the calculation is the number of portfolios or the number of portfolios minus one. B) The standard deviation should be shown using either equal weightings or asset weightings. C) No measure of dispersion needs to be presented.



C: Less than 5 portfolios, no need to disclose measure of dispersion.

Yeah GSG is right the answer is C for the same reason he stated. I choose A :frowning:

I also chose C but for a wrong reason. I figured standard deviation can be calculated for the composite. Does GIPS require calculating a measure of dispersion for a composite that consists of more than 5 portfolios?

Yes. A measure of internal dispersion is required.

C. I explain myself to no one.