I would start a new thread… I am counting on multiple choice to help me out with GIPS. It’s hard to memorize all the little details. Just pay attention to the years of the data in the question, because sometimes before and after a date makes a difference.
Ok, looked it up again. Did it correctly in that A.M., because they explicitly say “Fees will be calculated based on year-end value of the portfolio and paid in arrears on the first day of the following year”. So fees will actually be paid. I remember another example, I think A.M. 2007, where it was management costs. There was no effect on liquidity because it was just trading costs, comissions, whatever.
Bottom line is, I would include it if they say that it will be paid somehow. Otherwise it may be deducted on a daily basis or in intervals we dont know and you cannot estimate the value of the next year correctly (dependent on AuM). 2013 is the only example where I included it.
Are you sure on this? page 90 of CFA book refers to a 45% target SAA with corridor of +/-4.5% as having a range of 49.5% and 40.5%. Were you referring to the adhoc percent of SAA method?
Must have full compliance statement, specify if verified or not - Present at least 5 years return or S/I - Present amount asset in composite and total firm assets or percentage of total firm represented by composite - Starting 2011, present trailing 36 months standard dev of composite & bench - Starting 2010, carve-outs must include their own cash balance in order to be included in a composite. Cash allocation policy would not be GIPS compliance. - Starting in 2010, composite returns must be calculated by asset weighting the individual portfolio returns at least monthly - For Real Estate return calculations must be done at least quarterly. Valuations must be done at least every 12 months starting in 2012 (unless client agreement allows up to 36 months), at least every 36 months before 2012 - Must provide relevant fee schedule or say available - Required to disclose that policies for valuing porfolios, calculating returns, and preparing compliant presentations are available upon request. - Description of all firm composites and benchmarks (if performance info is presented) - Not necessary to disclose # of accounts in composite if <= 5 - Don’t include non-discretionary portfolios
When you calculate Effective Annual Rate on a loan with option, it usually says “XYZ company usually borrows are LIBOR + 100 bps”, or some other number
You first calculate the future value of the option premium using current LIBOR. BUT, you must also add the 100 bps XYZ usually borrows at, I always forget this part.
Are you sure on this? page 90 of CFA book refers to a 45% target SAA with corridor of +/-4.5% as having a range of 49.5% and 40.5%. Were you referring to the adhoc percent of SAA method?
This is a really dumb mistake. But often you are given statements A, B and C and the question asks you which is correct. DON’T assume YOUR answer A represents statement A.
Yes. It can be done both ways, it just depends on how it is worded (which is why I made the mistake). On the question (2010 CFAI AM #8) it asks for “corridor widths at +/- 10% of the target allocation.” So they wanted you to take 10% of the target allocation and then use that smaller figure to make the range (so 40% SAA became 36-44%).