Final answer:
GIPS compliance is optional for investment firms, and it serves as a set of ethical guidelines for presenting performance data, helping build trust with clients. Therefore, the correct answer is D) Firms adopting GIPS compliance is optional.
Step-by-step explanation:
To answer your question regarding Global Investment Performance Standards (GIPS): Firms adopting GIPS compliance is optional. It is a set of standardized, industry-wide ethical principles that guide investment firms on how to calculate and present their investment performance to prospective clients.
Although adopting GIPS is not mandated by law, it can be a sign of commitment to ethical best practices and transparency, which can be beneficial for firms in building trust with clients.
To be GIPS compliant, a firm must adopt GIPS compliance is essential. Option C is correct. GIPS (Global Investment Performance Standards) compliance is a set of ethical principles that investment firms can voluntarily adopt to ensure transparent reporting and accurate presentation of their investment performance.
It is considered essential for firms that aim to demonstrate their commitment to providing reliable and consistent investment information to clients and investors.
Therefore, the correct answer is D) Firms adopting GIPS compliance is optional.