S7 - Alt Investments pre test

If an individual contributes 25% of the capital in a company, their equity ownership is:

• 75%

• 50%

• 25%

• 100%

Which type of private equity involves minority investment in mature companies?

• Buy-outs

• Angel Investing

• Growth equity

• Seed funding

An investor buys a share in a publicly traded REIT that owns shopping malls across the U.S. How will they primarily earn returns?

• Interest on mortgage loans

• Rent collected from tenants

• Merger & acquisition profit

• Interest paid on loans taken to finance the shopping malls

What is a common reason investors choose alternative investments?

• Guaranteed liquidity

• High correlation with stocks

• Portfolio diversification

• No management fee

Which of the following are classical means of Financing?

• Equity

• Debt

• Bank deposits

• Both equity and Debt

What are REITs?

• Real Estate Investment Tax

• Real Estate Investment Trusts

• Regional Equity Investment Trusts

• Real Equity Index trusts

Which of the following factors is most likely to be a characteristic of alternative investments?

• High regulation

• High transparency

• Narrow fund manager specialisation

• High liquidity

The 2/20 fee model refers to:

• 2% sales tax and 20% interest

• 2% fund exit fee and 20% dividend

• 2% equity and 20% ownership

• 2% management fee and 20% performance fee

Which of the following is a hard commodity?

• Coffee

• Wheat

• Crude oil

• Cotton

A financial institution pools credit card receivables and sells them as securities to institutional investors. What kind of instrument has been created?

• Mortgage-Backed Security

• Credit Default Swap

• Asset backed security

• Convertible note