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Basic Question 2 of 3
According to the Global Investment Performance Standards (GIPS), when dealing with the statement of "firm composites must be defined according to similar investment objectives and strategies," under the heading of Composite Construction, which statement(s) is (are) correct?
II. equity and a bond portfolio, both of which aim for long-term performance
III. two bond portfolios, one with a long-term strategy and the other with a short-term strategy
IV. equity portfolio and a bond portfolio, one with a long-term strategy and the other with a short-term strategy
A firm may combine the following portfolios into a composite ______.
I. two bond portfolios, both of which aim for long-term performance
II. equity and a bond portfolio, both of which aim for long-term performance
III. two bond portfolios, one with a long-term strategy and the other with a short-term strategy
IV. equity portfolio and a bond portfolio, one with a long-term strategy and the other with a short-term strategy
User Contributed Comments 4
| User | Comment |
|---|---|
| Slothrop | Do equity and bond portfolios automatically have dissimilar investment objectives and strategies? |
| sunny | yes. they may aim for long-term performance but they do have different risk-return characteristics and strategies. |
| judylyh | but according to the notes, it is 'or' not 'and' |
| vatsal92 | Group of individual discretionary portfolios that are managed with same objective (nature) or objective (term). |
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Learning Outcome Statements
explain the purpose of composites in performance reporting
CFA® 2025 Level I Curriculum, Volume 6, Module 4.