L1 R05 GIPS Q-Bank With Answers

Level I R05 Global Investment
Performance Standards (GIPS)

Test Code: L1 R05 GIPS Q-Bank 2020
Number of questions: 24
Question Q-Code: L1-ES-GIPS-001 LOS a Section 4
1 Which of the following is not a key feature of the GIPS standards ?
A) All actual, discretionary, fee-paying and non-fee paying portfolios must be included in at least one composite.
B) Firms must use accurate input data, follow certain calculation methodologies and disclose the method used.
C) Firms must comply with all requirements of the GIPS standards.
Answer A) All actual, discretionary, fee-paying and non-fee paying portfolios must be included in at least one composite.
Explanation A is correct. It is not mandatory for non-fee paying portfolios to be included in at least one composite. A composite
must include only actual, fee-paying discretionary portfolios. Section 4. LO.a.
2 Which of the following is least likely a feature of the GIPS standards?
A) The GIPS standards rely on the integrity of input data.

B) Firms must comply with all requirements of the GIPS standards, including any updates, Guidance Statements,
interpretations, Questions & Answers (Q&As), and clarifications published by CFA Institute and the GIPS Executive
Committee.
C) The GIPS standards promote the use of accurate and consistent investment performance data.
Answer C) The GIPS standards promote the use of accurate and consistent investment performance data.
Explanation C is correct. This is a goal of the GIPS Executive Committee and not a key feature.
The key features of GIPS are as follows:
The GIPS standards are the ethical standards for investment performance presentation to ensure fair
representation and full disclosure of investment performance. In order to claim compliance, firms must adhere
to the requirements included in the GIPS standards.
Meeting the objectives of fair representation and full disclosure is likely to require more than simply adhering to
the minimum requirements of the GIPS standards. Firms should also adhere to the recommendations to achieve
best practice in the calculation and presentation of performance.
The GIPS standards require firms to include all actual, discretionary, fee-paying portfolios in at least one
composite defined by investment mandate, objective, or strategy in order to prevent firms from cherry-picking
their best performance. This means firms must create composites and each actual, fee-paying, discretionary
portfolio must be in at least one composite. If a portfolio is not included in any composite, then the returns
associated with it will not be included.
The GIPS standards rely on the integrity of input data. The accuracy of input data is critical to the accuracy of
performance presentation. The underlying valuations of portfolio holdings drive the portfolio’s performance. It is
essential that these and other inputs are accurate. The GIPS standards require firms to adhere to certain
calculation methodologies and to make specific disclosures along with the firm’s performance.
Firms must comply with all requirements of the GIPS standards.
The goals of the GIPS Executive Committee are presented below:
To establish investment industry best-practices for calculating and presenting investment performance that
promote investor interests and instill investor confidence.
To obtain worldwide acceptance of a single standard for the calculation and presentation of investment
performance based on the principles of fair presentation and full disclosure.
To promote the use of accurate and consistent performance data.
To encourage fair global competition among investment firms without creating barriers to entry; and
To foster the notion of industry “self-regulation” on a global basis.
Section 1. LO.a.
3 Which of the following statements is most likely correct ?

A) All actual, discretionary, fee-paying portfolios must be included in at least one composite defined by investment
mandate, objective, or strategy.
B) Only actual, non-discretionary, non-fee-paying portfolios must be included in at least one composite defined by
investment mandate, objective, or strategy.
C) Only actual, discretionary, non-fee-paying portfolios must be included in at least one composite defined by
investment mandate, objective, or strategy.
Answer A) All actual, discretionary, fee-paying portfolios must be included in at least one composite defined by investment
mandate, objective, or strategy.
Explanation A is correct. One of the key features of GIPS standards is that all actual, discretionary, fee-paying portfolios must
be included in at least one composite defined by investment mandate, objective, or strategy in order to prevent
firms from cherry-picking their best performance. Section 4. LO.a.
4 Which of the following is most likely a feature of the GIPS standards? GIPS standards:
A) foster the notion of industry “self-regulation” on a global basis.

B) encourage fair, global competition among investment firms without creating barriers to entry.
C) are ethical standards for investment performance presentation to ensure fair representation and full disclosure
of investment performance.
Answer C) are ethical standards for investment performance presentation to ensure fair representation and full disclosure
of investment performance.
Explanation C is correct. The other two options are goals of the GIPS Executive Committee.
The key features of GIPS are as follows:
The GIPS standards are the ethical standards for investment performance presentation to ensure fair
representation and full disclosure of investment performance. In order to claim compliance, firms must adhere
to the requirements included in the GIPS standards.
Meeting the objectives of fair representation and full disclosure is likely to require more than simply adhering to
the minimum requirements of the GIPS standards. Firms should also adhere to the recommendations to achieve
best practice in the calculation and presentation of performance.
The GIPS standards require firms to include all actual, discretionary, fee-paying portfolios in at least one
composite defined by investment mandate, objective, or strategy in order to prevent firms from cherry-picking
their best performance. This means firms must create composites and each actual, fee-paying, discretionary
portfolio must be in at least one composite. If a portfolio is not included in any composite, then the returns
associated with it will not be included.
The GIPS standards rely on the integrity of input data. The accuracy of input data is critical to the accuracy of
performance presentation. The underlying valuations of portfolio holdings drive the portfolio’s performance. It is
essential that these and other inputs are accurate. The GIPS standards require firms to adhere to certain
calculation methodologies and to make specific disclosures along with the firm’s performance.
Firms must comply with all requirements of the GIPS standards.
The goals of the GIPS Executive Committee are presented below:
To establish investment industry best-practices for calculating and presenting investment performance that
promote investor interests and instill investor confidence.
To obtain worldwide acceptance of a single standard for the calculation and presentation of investment
performance based on the principles of fair presentation and full disclosure.
To promote the use of accurate and consistent performance data.
To encourage fair global competition among investment firms without creating barriers to entry; and
To foster the notion of industry “self-regulation” on a global basis.
Section 1. LO.a.
5 Which of the following statements is most likely a key feature of the GIPS standards? In order to meet the
objectives of fair representation and full disclosure and achieve best practice in the calculation and presentation of
performance,
A) firms should adhere to the minimum requirements of the GIPS standards, but adhering to the recommendations
is optional.
B) firms should adhere to the minimum requirements and recommendations of the GIPS standards.
C) it is enough if firms comply with the standard related to Performance Presentation in the CFA Institute Standards
of Practice Handbook.
Answer B) firms should adhere to the minimum requirements and recommendations of the GIPS standards.
Explanation B is correct. To achieve best practice in calculation and presentation of performance, firms should adhere to the
minimum requirements and recommendations of GIPS standards. Section 1. LO.a.
6 The fundamentals of compliance section under GIPS standards has how many requirements ?
A) 10.
B) 16.
C) 15.
Answer B) 16.
Explanation B is correct. There are 16 requirements under Fundamentals of Compliance section. These are as below:
0.A.1: Firms must comply with all the requirements of the GIPS standards, including any updates, Guidance
Statements, interpretations, Questions & Answers (Q&As), and clarifications published by CFA Institute and the
GIPS Executive Committee, which are available on the GIPS standards website (www.gipsstandards.org) as well as
in the GIPS Handbook.
0.A.2: Firms must comply with all applicable laws and regulations regarding the calculation and presentation of
performance.
0.A.3: Firms must not present performance or performance-related information that is false or misleading.
0.A.4: The GIPS standards must be applied on a firm-wide basis.
0.A.5: Firms must document their policies and procedures used in establishing and maintaining compliance with the
GIPS standards, including ensuring the existence and ownership of client assets, and must apply them consistently.
0.A.6: If the firm does not meet all the requirements of the GIPS standards, the firm must not represent or state
that it is “in compliance with the Global Investment Performance Standards except for . . .” or make any other
statements that may indicate partial compliance with the GIPS standards.
0.A.7: Statements referring to the calculation methodology as being “in accordance,” “in compliance,” or
“consistent” with the Global Investment Performance Standards, or similar statements, are prohibited.
0.A.8: Statements referring to the performance of a single, existing client portfolio as being “calculated in
accordance with the Global Investment Performance Standards” are prohibited, except when a GIPS-compliant firm
reports the performance of an individual client’s portfolio to that client.
0.A.9: Firms must make every reasonable effort to provide a compliant presentation to all prospective clients. Firms
must not choose to whom they present a compliant presentation. As long as a prospective client has received a
compliant presentation within the previous 12 months, the firm has met this requirement.
0.A.10: Firms must provide a complete list of composite descriptions to any prospective client that makes such a
request. Firms must include terminated composites on the firm’s list of composite descriptions for at least five
years after the composite termination date.
0.A.11: Firms must provide a compliant presentation for any composite listed on the firm’s list of composite
descriptions to any prospective client that makes such a request.
0.A.12: Firms must be defined as an investment firm, subsidiary, or division held out to clients or prospective clients
as a distinct business entity.
0.A.13: For periods beginning on or after 1 January 2011, total firm assets must be the aggregate fair value of all
discretionary and non-discretionary assets managed by the firm. This includes both fee-paying and non-fee-paying
portfolios.
0.A.14: Total firm assets must include assets assigned to a sub-advisor provided the firm has discretion over the
selection of the sub-advisor.
0.A.15: Changes in a firm’s organization must not lead to alteration of historical composite performance.
0.A.16: When the firm jointly markets with other firms, the firm claiming compliance with the GIPS standards must
be sure that it is clearly defined and separate relative to other firms being marketed, and that it is clear which firm is
claiming compliance.
Section 1. LO.a.
7 According to the Fundamentals of Compliance section of the GIPS standards, which of the following is least likely a
requirement for claiming compliance ?
A) Statements referring to the calculation methodology as being “in accordance,” “in compliance,” or “consistent”
with the Global Investment Performance Standards, or similar statements, are prohibited.
B) Firms must provide a complete list of composite descriptions to any prospective client that makes such a
request.
C) For periods beginning on or after 1 January 2010, total firm assets must be the aggregate fair value of all fee-
paying portfolios managed by the firm.
Answer C) For periods beginning on or after 1 January 2010, total firm assets must be the aggregate fair value of all fee-
paying portfolios managed by the firm.
Explanation C is correct. The condition for total firm assets is for periods beginning on or after 1 January, 2011, and includes
both fee-paying and non-fee-paying portfolios.
Requirements: Fundamentals of Compliance section of the GIPS standards
0.A.1: Firms must comply with all the requirements of the GIPS standards, including any updates, Guidance
Statements, interpretations, Questions & Answers (Q&As), and clarifications published by CFA Institute and the
GIPS Executive Committee, which are available on the GIPS standards website (www.gipsstandards.org) as well as
in the GIPS Handbook.
performance.
0.A.4: The GIPS standards must be applied on a firm-wide basis.
statements that may indicate partial compliance with the GIPS standards.
0.A.7: Statements referring to the calculation methodology as being “in accordance,” “in compliance,” or
“consistent” with the Global Investment Performance Standards, or similar statements, are prohibited.
reports the performance of an individual client’s portfolio to that client.
0.A.9: Firms must make every reasonable effort to provide a compliant presentation to all prospective clients. Firms
must not choose to whom they present a compliant presentation. As long as a prospective client has received a
compliant presentation within the previous 12 months, the firm has met this requirement.
0.A.10: Firms must provide a complete list of composite descriptions to any prospective client that makes such a
request. Firms must include terminated composites on the firm’s list of composite descriptions for at least five
years after the composite termination date.
0.A.13: For periods beginning on or after 1 January 2011, total firm assets must be the aggregate fair value of all
discretionary and non-discretionary assets managed by the firm. This includes both fee-paying and non-fee-paying
portfolios.
0.A.15: Changes in a firm’s organization must not lead to alteration of historical composite performance.
Section 1. LO.a.
8 Which of the following requirements under the Fundamentals of Compliance section is least likely correct ?
A) Firm must be defined as an investment firm, subsidiary, or division held out to clients or prospective clients as a
distinct business entity.
B) Total firm assets must exclude assets assigned to a sub-advisor.
C) Firms must document their policies and procedures used in establishing and maintaining compliance with the
GIPS standards.
Answer B) Total firm assets must exclude assets assigned to a sub-advisor.
Explanation B is correct. They must include assets managed by a sub-advisor.
as a distinct business entity. Section 1. LO.a.
9 Which of the following is not a requirement under the Fundamentals of Compliance section of the GIPS Standards?
A) A firm must be properly defined.

B) Firms must provide compliant presentation only to existing clients.
C) Firms must comply with all applicable laws and regulations regarding the calculation and presentation of
performance.
Answer B) Firms must provide compliant presentation only to existing clients.
Explanation B is correct. Compliant presentation must be provided to prospective clients, as well.
performance. Section 1. LO.a.
10 Which of the following is most likely a requirement under Fundamentals of Compliance section of the GIPS
Standards?
A) The GIPS standards must be applied on a firm wide basis.

B) The GIPS standards may be applied only to specific clients’ portfolios or selected composites.
C) Firms must comply with the CFA Institute Code and Standards regarding calculation and presentation of
performance.
Answer A) The GIPS standards must be applied on a firm wide basis.

Explanation A is correct. B is incorrect because the GIPS standards cannot be applied only to certain portfolios or composites.
C is incorrect because firms must comply with applicable laws and regulations regarding the calculation and
presentation of performance. Section 1. LO.a.
11 Which of the following is least likely a requirement under Fundamentals of Compliance section of the GIPS
Standards?
A) Firms must not present performance or performance-related information that is false or misleading.
B) Statements referring to the performance of a single, existing client portfolio as being “calculated in accordance
with the Global Investment Performance Standards” are prohibited, except when a GIPS-compliant firm reports the
performance of an individual client’s portfolio to that client.
C) Firms are required to provide a compliant presentation for any composite listed on the firm’s list of composite
descriptions to any existing client only that makes such a request, and not a prospective client.
Answer C) Firms are required to provide a compliant presentation for any composite listed on the firm’s list of composite
descriptions to any existing client only that makes such a request, and not a prospective client.
Explanation C is correct. Firms must provide a compliant presentation for any composite listed on the firm’s list of composite
Both A and B represent requirement under Fundamentals of Compliance.
reports the performance of an individual client’s portfolio to that client. Section 1. LO.a.
12 Which of the following is least likely a requirement under Fundamentals of Compliance section of the GIPS
Standards ?
A) Historical composite performance may be changed to reflect changes in a firm’s organization.

B) When the firm jointly markets with other firms, the firm claiming compliance with the GIPS standards must be
sure that it is clearly defined and separate relative to other firms being marketed, and that it is clear which firm is
C) If the firm does not meet all the requirements of the GIPS standards, the firm must not represent or state that it
is “in compliance with the Global Investment Performance Standards except for . . .”.
Answer A) Historical composite performance may be changed to reflect changes in a firm’s organization.
Explanation A is correct. Even when there is a change in a firm’s organization, the historical composite performance must not
be altered. Both B and C represent requirement under Fundamentals of Compliance.
statements that may indicate partial compliance with the GIPS standards. Section 1. LO.a.
Question Q-Code: L1-ES-GIPS-013 LOS b Section 1
13 Firms claiming compliance with the GIPS standards are required to present and report GIPS-compliant performance
for a minimum period of:
A) five years.
B) three years.
C) seven years.
Answer A) five years.

Explanation A is correct. GIPS provisions for presentation and reporting require that at least 5 years of compliant performance
must initially be shown. If the firm or composite has been in existence for less than five years, the presentation
should include performance since inception.
After initial compliance,
The firm must add one year of compliant presentation each year,
So that the firm eventually presents a minimum performance history of 10 years.
Section 1. LO.b.
14 According to the Fundamentals of Compliance section, what are firms recommended to provide to each existing
client on an annual basis? A compliant presentation of:
A) all composites of the firm.

B) the composite in which the client’s portfolio is included.
C) the client’s portfolio.
Answer B) the composite in which the client’s portfolio is included.
Explanation B is correct. A compliant presentation must have the composite in which the client’s portfolio is included.
0.B.4 Firms should provide to each existing client, on an annual basis, a compliant presentation of the composite in
which the client’s portfolio is included. Section 1. LO.b.
15 If a composite has been in existence for less than five years, then for what period is the firm most likely required to
present GIPS-compliant performance?
A) Two years.
B) One year.
C) Since inception date.
Answer C) Since inception date.
Explanation C is correct. A firm is required to initially present, at a minimum, five years of annual investment performance that
are compliant with the GIPS standards. If the firm or the composite has been in existence for less than five years,
the firm must present performance since the firm’s inception or the composite’s inception date. Section 1. LO.b.
16 GP Asset Management Company is defined as a firm according to GIPS standards. The firm’s inception date is 1
January 2013, and it has been in existence for less than five years. After it builds up GIPS-compliant performance
for five years until 31 December 2017, is the firm required to add additional years of GIPS-complaint performance?
A) Yes, one more year.

B) No, as five years is the minimum requirement.
C) Yes, till the firm builds up to a minimum of 10 years of GIPS-complaint performance.
Answer C) Yes, till the firm builds up to a minimum of 10 years of GIPS-complaint performance.
Explanation C is correct. A firm is required to initially present, at a minimum, five years of annual investment performance that
are compliant with the GIPS standards. If the firm or the composite has been in existence for less than five years,
the firm must present performance since the firm’s inception or the composite’s inception date. Later the firm
must present an additional year of performance each year, building up to a minimum of 10 years of GIPS-compliant
performance. Section 1. LO.b.
17 PA Asset Management Company is defined as a firm according to GIPS standards. The firm’s inception date is 1
January, 1998. It is now 1 January, 2014. The firm claims compliance with GIPS Standards from 1 January, 2000. Is
the firm allowed to link non-GIPS compliant performance to GIPS complaint performance ?
A) Yes, if the firm discloses the periods of non-compliance.

B) No, since the non-compliant period is before 1 January, 2000.
C) No, since non-complaint GIPS performance cannot be linked to GIPS-complaint performance
Answer A) Yes, if the firm discloses the periods of non-compliance.
Explanation A is correct. Firms may link non-GIPS compliant performance to their GIPS-compliant performance provided that
only GIPS-compliant performance is presented for periods after 1 January, 2000 and the firm discloses the periods
of non-compliance. Section 1. LO.b.
18 PA Asset Management Company is defined as a firm according to GIPS standards. The firm’s inception date is 1
January, 2000. It is now 1 January, 2014. The firm claims compliance with GIPS Standards from 1 January, 2006. Is
the firm allowed to link non-GIPS compliant performance to GIPS complaint performance?
A) Yes, if the firm discloses the periods of non-compliance.

B) No, since the non-compliant period is on or after 1 January, 2000.
C) No, since non-complaint GIPS performance cannot be linked to GIPS-complaint performance.
Answer B) No, since the non-compliant period is on or after 1 January, 2000.
Explanation B is correct. Firms may link non-GIPS compliant performance to their GIPS-compliant performance provided that
only GIPS-compliant performance is presented for periods after 1 January, 2000 and the firm discloses the periods
of non-compliance. Section 1. LO.b.
Question Q-Code: L1-ES-GIPS-019 LOS c Section 1
19 Eritba is a small island nation in the Pacific where laws and regulations exist for calculation and presentation of
investment performance. According to the GIPS standards, what laws are firms in Eritba encouraged to comply
with for the calculation and presentation of investment performance ?
A) GIPS standards only.

B) Applicable law, regulations, and GIPS standards.
C) Applicable law and regulations only.
Answer B) Applicable law, regulations, and GIPS standards.
Explanation B is correct. 0.A.2: Firms must comply with all applicable laws and regulations regarding the calculation and
presentation of performance. If there are no applicable laws and rules, then GIPS compliant firms must follow the
GIPS standards. But, if a country has applicable laws and regulations regarding the calculation and presentation of
performance, then the country laws must be followed and any differences with GIPS must be documented. Section
1. LO.c.
Question Q-Code: L1-ES-GIPS-020 LOS c Section 1
20 Arizu is a land-locked nation where laws and regulations exist for calculation and presentation of investment
performance. In some areas relating to real estate and private equity investments, there is a conflict between
applicable laws and GIPS Standards. According to the GIPS standards, what laws are the firms in Arizu encouraged
to comply with for calculating and presenting investment performance?
A) GIPS standards.
B) Either GIPS or applicable law with a disclosure of the standard being followed.
C) Applicable law and regulations with a disclosure of the conflict in the compliant presentation.
Answer C) Applicable law and regulations with a disclosure of the conflict in the compliant presentation.
Explanation C is correct. In cases in which laws and/or regulations conflict with the GIPS standards, firms are required to
comply with the laws and regulations and make full disclosure of the conflict in the compliant presentation. Firms
can still claim compliance with GIPS but they must disclose wherever there is a deviation that the law of the land is
being followed. Section 1. LO.c.
Question Q-Code: L1-ES-GIPS-021 LOS d Section 1
21 Which of the following is least likely related to the ‘input data’ section of GIPS ?
A) Input data needs to be compliant.

B) Input data needs to be consistent.
C) Portfolios must be valued in accordance with the definition of fair value and the GIPS Valuation Principles.
Answer A) Input data needs to be compliant.
Explanation A is correct. Here is an excerpt from the GIPS input data section: “Consistency of input data used to calculate
performance is critical to effective compliance with the GIPS standards and establishes the foundation for full, fair,
and comparable investment performance presentations. For periods beginning on or after 1 January 2011, all
portfolios must be valued in accordance with the definition of fair value and the GIPS Valuation Principles.” Section
1. LO.d.
22 Which of the following is not one of the nine sections of the provisions of the Global Investment Performance
Standards?
A) Disclosure.
B) Processed Data.
C) Real Estate.
Answer B) Processed Data.
Explanation B is correct. It is Input Data, not Processed Data.
The provisions within the 2010 edition of the GIPS standards are divided into nine sections:
1. Fundamentals of Compliance
2. Input Data
3. Calculation Methodology
4. Composite Construction
5. Disclosure
6. Presentation and Reporting
7. Real Estate
8. Private Equity
9. Wrap Fee. Separately Managed Account (SMA) Portfolios
Section 1. LO.d.
23 The composite return is most likely calculated as the:
A) Asset-weighted average of the performance of all portfolios in the composite.

B) Time-weighted return of the performance of all portfolios in the composite.
C) Mean return of the performance of all portfolios in the composite.
Answer A) Asset-weighted average of the performance of all portfolios in the composite.
Explanation A is correct. A composite is an aggregation of one or more portfolios managed according to a similar investment
mandate, objective, or strategy. The composite return is the asset-weighted average of the performance of all
portfolios in the composite. Section 1. LO.d.
24 A firm does not disclose the use of significant leverage in a particular composite strategy. The firm claims
compliance with GIPS standards and includes a footnote in the compliant presentation that the firm has been
verified by an independent third party. Has the firm violated the GIPS standards?
A) Yes.
B) No, since leverage is not a mandatory disclosure.
C) No, since disclosure is required only for derivatives and short positions.
Answer A) Yes.
Explanation A is correct. The extent of leverage for every firm must be disclosed along with the claim of compliance. To comply
with the GIPS standards, firms must disclose certain information in all compliant presentations regarding their
performance and the policies adopted by the firm. One of the essential disclosures for every firm is the claim of
compliance. Section 1. LO.d.

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Level I R05 Global Investment

Performance Standards (GIPS)

Question Q-Code: L1-ES-GIPS-001 LOS a Section 4

1 Which of the following is not a key feature of the GIPS standards ?

Question Q-Code: L1-ES-GIPS-002 LOS a Section 1

2 Which of the following is least likely a feature of the GIPS standards?

A) The GIPS standards rely on the integrity of input data.

The key features of GIPS are as follows:

The goals of the GIPS Executive Committee are presented below:

Question Q-Code: L1-ES-GIPS-003 LOS a Section 4

3 Which of the following statements is most likely correct ?

Question Q-Code: L1-ES-GIPS-004 LOS a Section 1

A) foster the notion of industry “self-regulation” on a global basis.

The key features of GIPS are as follows:

The goals of the GIPS Executive Committee are presented below:

Question Q-Code: L1-ES-GIPS-005 LOS a Section 1

Question Q-Code: L1-ES-GIPS-006 LOS a Section 1

0.A.4: The GIPS standards must be applied on a firm-wide basis.

Question Q-Code: L1-ES-GIPS-007 LOS a Section 1

Requirements: Fundamentals of Compliance section of the GIPS standards

0.A.4: The GIPS standards must be applied on a firm-wide basis.

Question Q-Code: L1-ES-GIPS-008 LOS a Section 1

Answer B) Total firm assets must exclude assets assigned to a sub-advisor.

Explanation B is correct. They must include assets managed by a sub-advisor.

Question Q-Code: L1-ES-GIPS-009 LOS a Section 1

A) A firm must be properly defined.

Answer B) Firms must provide compliant presentation only to existing clients.

Explanation B is correct. Compliant presentation must be provided to prospective clients, as well.

Question Q-Code: L1-ES-GIPS-010 LOS a Section 1

A) The GIPS standards must be applied on a firm wide basis.

Answer A) The GIPS standards must be applied on a firm wide basis.

Question Q-Code: L1-ES-GIPS-011 LOS a Section 1

Both A and B represent requirement under Fundamentals of Compliance.

Question Q-Code: L1-ES-GIPS-012 LOS a Section 1

A) Historical composite performance may be changed to reflect changes in a firm’s organization.

Question Q-Code: L1-ES-GIPS-013 LOS b Section 1

Answer A) five years.

After initial compliance,

Question Q-Code: L1-ES-GIPS-014 LOS b Section 1

A) all composites of the firm.

Answer B) the composite in which the client’s portfolio is included.

Question Q-Code: L1-ES-GIPS-015 LOS b Section 1

Answer C) Since inception date.

Question Q-Code: L1-ES-GIPS-016 LOS b Section 1

A) Yes, one more year.

Question Q-Code: L1-ES-GIPS-017 LOS b Section 1

A) Yes, if the firm discloses the periods of non-compliance.

Answer A) Yes, if the firm discloses the periods of non-compliance.

Question Q-Code: L1-ES-GIPS-018 LOS b Section 1

A) Yes, if the firm discloses the periods of non-compliance.

Answer B) No, since the non-compliant period is on or after 1 January, 2000.

Question Q-Code: L1-ES-GIPS-019 LOS c Section 1

A) GIPS standards only.

Answer B) Applicable law, regulations, and GIPS standards.

Question Q-Code: L1-ES-GIPS-020 LOS c Section 1

A) Input data needs to be compliant.

Answer A) Input data needs to be compliant.

Question Q-Code: L1-ES-GIPS-022 LOS d Section 1

Answer B) Processed Data.

Explanation B is correct. It is Input Data, not Processed Data.

Question Q-Code: L1-ES-GIPS-023 LOS d Section 1

23 The composite return is most likely calculated as the:

A) Asset-weighted average of the performance of all portfolios in the composite.

Answer A) Asset-weighted average of the performance of all portfolios in the composite.