Finance Unbox-ED ($) - Grade 6-8 - Session 036 - Quiz 1

Select all the statements that are true

• VC funds invest in early stage companies or start-ups
• PE funds invest in established companies
• Investors in VC and PE funds are in most cases individual investors
• All of the above

Select all the statements that are true about VCs and PEs

• Invest in over a dozen companies from each fund and hence there is some diversification
• Since most investments are in listed companies the fund is invested in a few months
• Stay invested in companies for several years and hence is considered a long-term investment!
• All of the above

Institutional investors can get their money back from VC and PE funds at short notice or whenever they like

• True
• False

Select the statement that is true about VCs and PEs

• Charge a management fee every year on the fund
• Retain a certain portion of the profits on investments
• Both of the above
• None of the above

PEs and VCs need to share losses with institutional investors since they also share profits

• True
• False

Investment in a VC fund has the same risk as investment in a PE fund

• True
• False

VC funds in USA are on average around ten times the size of a PE fund

• True
• False

VC and PE funds always use an IPO to exit their investments

• True
• False

Select all the ways in which hedge funds are similar to VC and PE funds

• Raise funds from institutional investors
• Invest across multiple asset classes
• Both of the above
• None of the above

Select all the ways in which hedge funds are different than VC and PE funds

• Charge both management and performance fees
• Make both short-term and long-term investments
• Both of the above
• None of the above