CFA Level 1 Question of the Week: Standards of Professional Conduct

Question

Which of the following statements does not form part of the performance presentation guidance provided in the CFA Institute Standards of Professional Conduct?Terminated accounts should be included while presenting historical 
performance.All appropriate disclosures to fully explain performance should be made, 
including disclosures relating to use of simulation or other models to 
calculate results.Comparable performance numbers for similar funds of competitors should be 
provided along with the company’s own fund.

shannondaily · Answer

Woo! I got it right.

exam_whiz · Answer

Correct Answer:  CStandard III (D), Performance Presentation, requires terminated accounts to be included while presenting historical performance. Excluding terminated accounts generally leads to an upward bias in the results presented. All appropriate disclosures to fully explain performance should be made, including disclosures relating to use of simulation or other models to calculate results.The standard does not require presenting competitor fund performance along with the company’s fund.