The column titled “Composite Dispersion (%)” is incomplete; it should be accompanied by a footnote describing the measure of dispersion being used. Omission or error?
omission
the official suggested answers said the other …
hmm…if you are referring to schweser as official, they cannot differentiate between omission and error… Will have to look at the entire table, but what if composite dispersion is measure is correct but it is not an internal measure of dispersion, IMHO, i think this is omission. GIPS requires an internal dispersion measure for the composite to be presented.
Omission would be if they left out Dispersion totally, but since they had dispersion but didnt label it, it was an error.
bigwilly Wrote: ------------------------------------------------------- > Omission would be if they left out Dispersion > totally, but since they had dispersion but didnt > label it, it was an error. I suppose you won’t label the column as “Internal dispersion using standard deviation of annual returns of portfolios”, eh? The dispersion methodology MUST be disclosed. So it’s a missing disclosure — omission.
when you say they did’nt lable it, do you mean they just reported a number but didnt explain what the number is (e.g. SD or some other measure) or do you mean that they did’nt mention the fact that it was an “internal measure of dispersion” ? I agree with you on the former that it was an error, but on the latter I still think it is an ommission. GIPS does not prevent you from reporting a dispersion measure as long as an internal measure of dispersion is also disclosed.
official means CFAI, it’s 2002 question I think it’s omission, I just dont agree with CFAI.
if you are referring to the end of the chapter question (question 28) in the CFAI book, there is no description at all of the composite dispersion. So we do not know if it is an internal measure of dispersion or some other measure. The best answers is therefore ERROR in this case.
right, I’m talking about that one. If I say there is an omission of the description of the composite dispersion, you won’t say I’m saying something wrong, right? I think it’s natural to think that as long as something is missing out there, it’s an omission. ERROR in this case is the CFA way.
Woohooo… Yeah I remember this kinda and i think i had some mixed.