Asset Management and Portfolio Performance Standards

Asset Management and Portfolio Performance Standards

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According to the AIMR-PPS, ________ are defined to include all discretionary and nondiscretionary assets.



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A. B. C. D.


Total firm assets are defined to include all discretionary and nondiscretionary assets. Total firm assets don't refer to assets underlying overlay investment strategies, such as currency overlay, options and futures overlays, securities lending programs and asset allocation overlay strategies, unless the firm actually manages the underlying assets.

According to the AIMR-PPS (Association for Investment Management and Research - Performance Presentation Standards), the term used to encompass all discretionary and nondiscretionary assets is "total firm assets."

Discretionary assets refer to the investment assets that are managed by an investment professional or firm on behalf of clients. These assets are typically managed according to specific investment mandates or strategies, and the investment professional has the authority to make investment decisions without obtaining explicit consent from the client for each transaction.

On the other hand, nondiscretionary assets are investment assets over which the investment professional or firm does not have discretionary authority. In this case, the investment professional may provide advice or recommendations to the client, but the client retains the final decision-making authority regarding the management of their assets.

The AIMR-PPS aims to provide standardized guidelines and principles for performance presentation and reporting in the investment management industry. In this context, "total firm assets" is used to represent the entirety of assets managed by the firm, whether they are discretionary or nondiscretionary.

Therefore, option C, "total firm assets," is the correct answer as per the AIMR-PPS guidelines.