FAILING TO DISCLOSE POLICIES AND PROCEDURES. MUST STATE THAT POLICI...

8. Failing to disclose policies and procedures.

Must state that policies and procedures for calculating and presenting performance will be

provided if requested.

Candidate discussion: (12 points maximum) 1 point for stating each non-compliant item. 2 points for each correct recommended change. (Study Session 18, LOS 34.b, c, d, e, f, k) QUESTION 9 HAS THREE PARTS FOR A TOTAL OF 14 MINUTES One year has passed since HNW Advisors first started operations. Their overall equity portfolio has returned 28.2% versus a return of 22.4% for the S&P 500. The standard deviation of the S&P 500 is 20%, and Maggie Day, CFA, has estimated the standard deviation of HNW Advisor's equity portfolio at 45%. HNW Advisor's equity portfolio has a beta of 1.35, and the risk-free rate is 4.4%. A major HNW client is attempting to evaluate the relative performance of HNW's equity fund. The client is unsure whether the Sharpe measure or the Treynor measure is appropriate for the HNW portfolio. ... A. Using the Sharpe and Treynor measures for the HNW portfolio and the S&P