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Free CFA-Level-I Exam Braindumps (page: 69)

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Which of the following is NOT true about Standard IV (A.2) - Research Reports?

  1. None of these answers.
  2. The analyst must separate fact from statistical conjecture to be in compliance with the standard.
  3. As long as the analyst has carried out adequate investigation, she can omit from the report certain aspects of the investigations that she deems unimportant.
  4. The report must contain a basic description of the characteristics of the investment under consideration.

Answer(s): A

Explanation:

Standard IV (A.2) - Research Reports



According to the AIMR-PPS, assets to which the Standards cannot be applied are not to be considered by firms when claiming compliance with the Standards. Which of the following is an example of an asset to which the Standards cannot be applied?

  1. Guaranteed investment contract assets
  2. Convertible securities
  3. International assets
  4. Assets managed to more than one base currency

Answer(s): A

Explanation:

Traditional GIC portfolios provide stable results that are not based on a mark-to-market valuation. The valuation of the traditional GIC is based on book value, not current market value, which are the valuations required by the total return calculation and reporting requirements of the Standards. GIC assets would be reported separately.



Under the Performance Presentation Standards, asset-weighting of portfolio returns within a composite is required. The ________ of period weightings must be used.

  1. beginning
  2. end
  3. none of these answers
  4. midpoint

Answer(s): A

Explanation:

Composites must be asset weighted using beginning-of-period weightings.



ERISA fiduciaries must adhere to the following prudent procedures:
- establish a written investment policy for the plan
- ________ plan assets - make investment decisions with the skill and care of aprudent expert
- monitor investment performance
- control investment expenses - avoid prohibited transactions

  1. distribute
  2. qualify
  3. account for
  4. none of these answers
  5. diversify

Answer(s): E

Explanation:

These procedures are stipulated under the detailing of ERISA fiduciary duties, to ensure that the fiduciary complies with the duty to act with prudence.






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