Performance Presentation Violations

Very Hard Cfa Institute Code And Standards Duties - Performance Presentation

In accordance with the CFA Institute Code of Ethics and Standards of Professional Conduct, investment professionals are required to present performance information in a manner that is both fair and accurate. Consider the following scenario: An investment manager is preparing to present the performance of a newly launched hedge fund to institutional investors. The manager chooses to present the fund's performance during its initial 12-month period in a manner that does not include the performance results of the fund's subsequent month, which happened to be negative. The manager argues that doing so would make the fund appear less favorable and could potentially hamper fundraising efforts.

Which of the following actions by the investment manager is most likely a violation of the Standards related to Performance Presentation?

Including only the positive return months of the hedge fund in the performance presentation, thereby highlighting only the best results.

Presenting the full performance results for the initial 12-month period, including the negative return from the most recent month.

Adjusting the performance presentation metrics to exclude costs associated with the management of the hedge fund.

Hint

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