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NEW QUESTION: 1
Which one of these risk factors would be the LEAST important consideration in choosing a building site for a new computer facility?
A. Vulnerability to natural disasters
B. Proximity to an airline flight path
C. Adjacent buildings and businesses
D. Vulnerability to crime
Answer: B

NEW QUESTION: 2
Which of the following configuration files should be modified to disable the ctrl-alt-delete key combination?
A. /etc/reboot
B. /proc/keys
C. /proc/inittab
D. /etc/keys
E. /etc/inittab
Answer: E

NEW QUESTION: 3
Sue Gano and Tony Cismesia are performance analysts for the Barth Group. Barth provides consulting and compliance verification for investment firms wishing to adhere to the Global Investment Performance Standards (GIPS ®). The firm also provides global performance evaluation and attribution services for portfolio managers. Barth recommends the use of GIPS to its clients due to its prominence as the standard for investment performance presentation.
One of the Barth Group's clients, Nigel Investment Advisors, has a composite that specializes in exploiting the results of academic research. This Contrarian composite goes long "loser" stocks and short "winner" stocks. The "loser' stocks are those that have experienced severe price declines over the past three years, while the "winner" stocks are those that have had a tremendous surge in price over the past three years.
The Contrarian composite has a mixed record of success and is rather small. It contains only four portfolios. Gano and Cismesia debate the requirements for the Contrarian composite under the Global Investment Performance Standards.
The Global Equity Growth composite of Nigel Investment Advisors invests in growth stocks internationally, and is tilted when appropriate to small cap stocks. One of Nigel's clients in the Global Equity Growth composite is Cypress University. The university has recently decided that it would like to implement ethical investing criteria in its endowment holdings. Specifically, Cypress does not want to hold the stocks from any countries that are deemed as human rights violators. Cypress has notified Nigel of the change, but Nigel does not hold any stocks in these countries. Gano is concerned that this restriction may limit investment manager freedom going forward.
Gano and Cismesia are discussing the valuation and return calculation principles for both portfolios and composites, which they believe have changed over time. In order to standardize the manner in which investment firms calculate and present performance to clients, Gano states that GIPS require the following:
Statement 1: The valuation of portfolios must be based on market values and not book values or cost.
Portfolio valuations must be quarterly for all periods prior to January 1, 2001. Monthly portfolio valuations and returns are required for periods between January 1, 2001 and January 1, 2010.
Statement 2: Composites are groups of portfolios that represent a specific investment strategy or objective.
A definition of them must be made available upon request. Because composites are based on portfolio valuation, the monthly requirement for return calculation also applies to composites for periods between January 1, 2001 and January 1, 2010.
The manager of the Global Equity Growth composite has a benchmark that is fully hedged against currency risk. Because the manager is confident in his forecasting of currency values, the manager does not hedge to the extent that the benchmark does. In addition to the Global Equity Growth composite, Nigel Investment Advisors has a second investment manager that specializes in global equity. The funds under her management constitute the Emerging Markets Equity composite. The benchmark for the Emerging Markets Equity composite is not hedged against currency risk. The manager of the Emerging Markets Equity composite does not hedge due to the difficulty in finding currency hedges for thinly traded emerging market currencies. The manager focuses on security selection in these markets and does not try to time the country markets differently from the benchmark.
The manager of the Emerging Markets Equity composite would like to add frontier markets such as Bulgaria, Kenya, Oman, and Vietnam to their composite, with a 20% weight- The manager is attracted to frontier markets because, compared to emerging markets, frontier markets have much higher expected returns and lower correlations. Frontier markets, however, also have lower liquidity and higher risk. As a result, the manager proposes that the benchmark be changed from one reflecting only emerging markets to one that reflects both emerging and frontier markets. The date of the change and the reason for the change will be provided in the footnotes to the performance presentation. The manager reasons that by doing so, the potential investor can accurately assess the relative performance of the composite over time.
Cismesia would like to explore the performance of the Emerging Markets Equity composite over the past two years. To do so, he determines the excess return each period and then compounds the excess return over the two years to arrive at a total two-year excess return. For the attribution analysis, he calculates the security selection effect, the market allocation effect, and the currency allocation effect each year. He then adds all the yearly security selection effects together to arrive at the total security selection effect. He repeats this process for the market allocation effect and the currency allocation effect.
What are the GIPS requirements for the Cypress University portfolio in the Global Equity Growth composite of Nigel Investment Advisors?
A. The historical and future record of performance of the Cypress University portfolio should be kept in the Global Equity Growth composite.
B. Because the Cypress University portfolio is nondiscretionary, its future record of performance must be removed from the Global Equity Growth composite.
C. Because the Cypress University portfolio is nondiscretionary, its historical and future record of performance must be removed from the Global Equity Growth composite.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The Cypress University portfolio is still a discretionary portfolio (i.e., the ethical investing restriction does not limit the ability of the manager to implement the investment strategy because Nigel does not hold any stocks in the countries of concern). Therefore, the historical and future record of performance for the Cypress University portfolio should be kept in the Global Equity Growth composite.
If at some point the ethical investing concern does limit the ability of the manager to implement the investment strategy, it would be deemed nondiscretionary and its future record of performance would not be included in the Global Equity Growth composite. Its historical record of performance would not be removed. (Study Session 18, LOS 49.g)