GIPS THIS QUESTION IS COMPOSED OF TWO PARTS (A, B) FOR A TOTAL OF 16 MINUTES Ron Weatherford is the owner of Creative Wealth Managers Inc., (CWM) CWM advises wealthy individual investors by recommending appropriate stocks, bonds, and alternative assets CWM has been in business since 1997, when Weatherford left his previous employer to form his own firm Weatherford has decided that CWM should provide a standardized presentation of its performance To so, he uses the CFA Institute’s Global Investment Performance Standards (GIPS) The table below and its footnotes are from Weatherford’s presentation of the performance for CWM’s Real Estate Composite Total Benchmark Number of Composite Total Composite Assets at the Return Return Portfolios Dispersion Beginning of Period (Millions of US$) 5.8% 8.2% 20 −6.8% −9.9% 9.9% 34 2.2% 3.6% 11 7.6% 66 9.7% 8.1% 17 8.1% 101 13.1% 9.1% 23 9.1% 124 11.6% 9.4% 48 9.4% 235 8.9% 11.1% 52 10.1% 245 18.3% 11.2% 51 11.2% 243 25.3% 19.8% 47 9.8% 238 19.8% 17.9% 48 7.9% 241 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015, 1st quarter −1.9% annualized −2.3% 49 8.3% 251 CWM claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards CWM has not been independently verified Notes: CWM is defined as an independent investment management firm that is not affiliated with any parent organization The firm invests in U.S and international securities The benchmark for this composite is the National Council of Real Estate Investment Fiduciaries (NCREIF) index The CWM’s Real Estate Composite was created in 2000 No modifications to the composite presented here have occurred as a result of changes in personnel or for any other reason at any time A complete list of firm composites and performance results is available upon request The dispersion of annual returns is measured by the standard deviation across assetweighted portfolio returns included within the composite for the full year Component returns were calculated separately using linked time-weighted rates of return Asset valuations were performed quarterly Performance results are presented before management fees but net of all transactions costs A management fee schedule is attached to this report Performance results are presented in U.S dollar terms A State whether or not each of the following segments of CWM’s presentation is consistent with a GIPS requirement Explain why Answer Question A in the template provided (6 minutes) Template for Question A Comment Is this element of CWM's presentation consistent with GIPS requirements? (circle one) Explanation Yes The length of data No The dispersion of the composite presented in the table and in the notes Yes No B Identify and explain five corrections necessary to make the report GIPS compliant (10 minutes) ... consistent with a GIPS requirement Explain why Answer Question A in the template provided (6 minutes) Template for Question A Comment Is this element of CWM's presentation consistent with GIPS requirements?... table and in the notes Yes No B Identify and explain five corrections necessary to make the report GIPS compliant (10 minutes)