Here’s an example I made up i like to call: 39923…Let’s see if you miss the trick. I did(n’t) since i made this up and am not violating any copy rights. 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 high/low range is inappropriate because the performance of portfolio C is not representative of the composite as a whole. C) No measure of dispersion needs to be presented. D) The standard deviation should be shown using either equal weightings or asset weightings. answer is C) No measures of dispersion need to be shown since the composite contains fewer than five portfolios.

I am so FU*KED!!

LOL…I actually figured that out when reading the question. Probably the only question on this board I’ve managed to even have a clue. Thanks for the confidence builder!!!

Good call…I think you should have to provide dispersion if you have 2 or more composites. just my thought… But yes <6 portfolios in a composite and no dispersion requried.

I thought it was less than 5, not 6…I’m so phucqed.

My bad it is 5…don’t worry PIMP

ummm i thought it is 6? Errata anyone?

also, some one correct me if i am wrong but high/low is always acceptable - i mean it doesnt matter if your returns are -100, 100, high-low is still acceptable (not the best though)

yes

I believe it is 6… There was an Errata update on this… I haven’t yet studied GIPS but do recall the Errata as I was updating my Schweser notes.

OH GOOD GOD! I said six, then i checked an older Stalla book and it said 5. I dont have my CFAI books or New Stalla books to check.

Schweser says 5 - they both can’t possibly be wrong.

Wasn’t there an Errata for Schweser that updated it to 6?

Didn’t see any.

I stand corrected… sorry guys for the confusion.

from GIPS handbook: A measure of DISPERSION of individual PORTFOLIO returns for each annual period. If the COMPOSITE contains 5 PORTFOLIOS or less for the full year, a measure of DISPERSION is not REQUIRED. [corrected September 2005]

So it is Less than 6!!

< 6, or <= 5.

equal to or less than 5 - ignore… CFAI

another one. dispersion is not risk measure there. some item-set question has this, not sure which tho. when I was doing that, I was so F up.