) IN THE FOOTNOTE OF THE PROMOTIONAL MATERIAL ABOUT THE PERFORMANCE...

3.) In the footnote of the promotional material about the performance of his portfolio

trading strategy, Litman is least likely in compliance with the CFA Institute Standards of

Professional Conduct with respect to:

A.

results.

B.

fees.

C.

taxes.

Answer = A

Standard III(D)–Performance Presentation allows the use of simulated performance

analysis as long as it is clearly stated that the results are simulated. Litman uses

historical data over 20 years, but he has only managed actual accounts for friends for 10

years. Consequently, he should have stated in the footnote that the results were

simulated.

“Guidance for Standards I–VII,” CFA Institute

Standard III(D)