Answer: Members should consider the knowledge and sophistication of the audience to whom the performance history is being presented.

## Explanation **Correct Answer: B** **Why Option B is correct:** Under the CFA Institute's Global Investment Performance Standards (GIPS®) and the Code and Standards, members have an obligation to present performance information fairly, accurately, and completely. One key aspect of this obligation is to consider the knowledge and sophistication of the audience when presenting performance history. This ensures that the presentation is appropriate for the audience's level of understanding and prevents misleading interpretations. **Why Option A is incorrect:** Using a single representative account for each investment mandate is generally not recommended. GIPS standards require firms to present composite performance that includes all fee-paying discretionary portfolios managed according to a particular investment mandate or objective. Using a single representative account could be misleading and would not comply with GIPS requirements for composite construction. **Why Option C is incorrect:** Excluding terminated accounts from performance presentation is generally not permitted under GIPS standards. Terminated accounts must be included in the composite performance up to their termination date. The standards require that terminated accounts be included in the historical performance record to prevent survivorship bias, which would otherwise inflate reported performance. **Key Principles:** 1. **Fair Representation**: Performance must be presented fairly, accurately, and completely 2. **Audience Consideration**: Presentations should be tailored to the audience's knowledge and sophistication 3. **Composite Construction**: Performance should represent all fee-paying discretionary portfolios in a composite 4. **Avoiding Survivorship Bias**: Terminated accounts must be included in historical performance This question tests understanding of Standard V(B) - Communication with Clients and Prospective Clients, which requires members to communicate fairly, accurately, and completely, taking into account the nature of the audience.

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