CIPM - Certificate in Investment Performance Measurement Practice Test

A consultant preparing a manager-search report receives nonpublic holdings from one candidate, public composite data from another, and an invitation to a sporting event from the incumbent manager. The client has a strict written gift policy. In a 2024 review focused on misrepresentation of GIPS verification, the facts include one favorable return period, one operational constraint, and one client-specific reporting objective. The observation window is 18 months, the mandate size is USD 925 million, and the policy threshold under discussion is 50 bps. The committee memo is dated May 5, 2024. Which action is most appropriate?

A USD 480 million balanced mandate had a USD 42 million contribution on the 18th day of a 30-day month, a 3.1% local-market rally before the contribution, and a currency hedge that settled after month-end. In a 2025 review focused on composite dispersion, the facts include one favorable return period, one operational constraint, and one client-specific reporting objective. The observation window is 48 months, the mandate size is USD 480 million, and the policy threshold under discussion is 500 bps. The committee memo is dated April 19, 2025. Which action is most appropriate?

A USD 480 million balanced mandate had a USD 42 million contribution on the 18th day of a 30-day month, a 3.1% local-market rally before the contribution, and a currency hedge that settled after month-end. In a 2025 review focused on large cash-flow policy, the facts include one favorable return period, one operational constraint, and one client-specific reporting objective. The observation window is 12 months, the mandate size is USD 260 million, and the policy threshold under discussion is 150 bps. The committee memo is dated February 22, 2025. Which action is most appropriate?

A private wealth portfolio starts the quarter with USD 18 million, receives USD 4 million from the owner after a strong first month, and ends with USD 23.7 million. The owner wants to know whether the manager or the cash timing drove the result. In a 2025 review focused on composite dispersion, the facts include one favorable return period, one operational constraint, and one client-specific reporting objective. The observation window is 18 months, the mandate size is USD 925 million, and the policy threshold under discussion is 50 bps. The committee memo is dated August 9, 2025. Which action is most appropriate?

A global equity composite includes fully discretionary accounts, one transition account funded mid-month, and a legacy account with stale prices for two thinly traded holdings. The firm is moving from monthly to daily valuation. In a 2025 review focused on fair valuation, the facts include one favorable return period, one operational constraint, and one client-specific reporting objective. The observation window is 60 months, the mandate size is USD 1350 million, and the policy threshold under discussion is 100 bps. The committee memo is dated February 6, 2025. Which action is most appropriate?