CFA 2018 level 3 schweser practice exam CFA 2018 level 3 question bank 13 GIPS questions(1)

To do so, he uses the CFA Institute’s Global Investment Performance Standards GIPS.. The table below and its footnotes are from Weatherford’s presentation of the performance for CWM’s Re

GIPS

THIS QUESTION IS COMPOSED OF TWO PARTS (A, B) FOR A TOTAL OF 16

MINUTES

Ron Weatherford is the owner of Creative Wealth Managers Inc., (CWM) CWM advises

wealthy individual investors by recommending appropriate stocks, bonds, and alternative assets CWM has been in business since 1997, when Weatherford left his previous employer to form his own firm Weatherford has decided that CWM should provide a standardized presentation of its performance To do so, he uses the CFA Institute’s Global Investment Performance Standards (GIPS) The table below and its footnotes are from Weatherford’s presentation of the

performance for CWM’s Real Estate Composite

Total

Return

Benchmark Return

Number of Portfolios

Composite Dispersion

Total Composite Assets at the Beginning of Period (Millions of US$)

2015,

1st quarter

annualized

CWM claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards CWM has not been independently verified

Notes:

1 CWM is defined as an independent investment management firm that is not affiliated with any parent organization The firm invests in U.S and international securities

2 The benchmark for this composite is the National Council of Real Estate Investment Fiduciaries (NCREIF) index

3 The CWM’s Real Estate Composite was created in 2000 No modifications to the

composite presented here have occurred as a result of changes in personnel or for any

other reason at any time A complete list of firm composites and performance results is available upon request

4 The dispersion of annual returns is measured by the standard deviation across asset- weighted portfolio returns included within the composite for the full year

5 Component returns were calculated separately using linked time-weighted rates of return Asset valuations were performed quarterly

6 Performance results are presented before management fees but net of all transactions costs A management fee schedule is attached to this report

7 Performance results are presented in U.S dollar terms

A State whether or not each of the following segments of CWM’s presentation is consistent

with a GIPS requirement Explain why

Answer Question A in the template provided

(6 minutes)

Template for Question A

Comment

Is this element of CWM's presentation consistent with GIPS requirements?

(circle one)

Explanation

The length of data

Yes

No

The dispersion of the

composite presented in

the table and in the notes

Yes

No

B.Identify and explain five corrections necessary to make the report GIPS compliant

(10 minutes)