Alter 1.11 Test

Q. If a commodity’s forward curve is downward sloping and there is little or no convenience yield, the market is said to be in:

• A. backwardation.
• B. contango.
• C. equilibrium.

None

• A. 7.8%.
• B. 7.4%.
• C. 5.8%.

Q. Private equity funds are most likely to use:

• A. merger arbitrage strategies.
• B. leveraged buyouts.
• C. market-neutral strategies.

Q. A private equity fund desiring to realize an immediate and complete cash exit from a portfolio company is most likely to pursue: (2020 Q18)

• A. an IPO.
• B. a trade sale.
• C. a recapitalization.

Q. An investor is seeking an investment that can take long and short positions, may use multi-strategies, and historically exhibits low correlation with a traditional investment portfolio. The investor’s goals will be best satisfied with an investment in:

• A. real estate.
• B. a hedge fund.
• C. a private equity fund.

Q. Until the committed capital is fully drawn down and invested, the management fee for a private equity fund is based on: (2022 Q33)

• A. invested capital.
• B. committed capital.
• C. assets under management.

Q. Angel investing capital is typically provided in which stage of financing? (2020 Q24)

• A. Later stage
• B. Formative stage
• C. Mezzanine stage

Which of the following is most likely a private real estate investment vehicle?

• A. Real estate limited partnership
• B. Real estate investment trust
• C. Collateralized mortgage obligation

Q. Both event-driven and macro hedge fund strategies use:

• A. long–short positions.
• B. a top-down approach.
• C. long-term market cycles.

Q. An investor in a private equity fund is concerned that the general partner can receive incentive fees in excess of the agreed-on incentive fees by making distributions over time based on profits earned rather than making distributions only at exit from investments of the fund. Which of the following is most likely to protect the investor from the general partner receiving excess fees? (2020 Q32)

• A. A high hurdle rate
• B. A clawback provision
• C. A lower capital commitment