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

Illiquidity is most likely a major concern when investing in:

A. real estate investment trusts.

Q. Alternative investment funds are typically managed:

B. to generate positive beta return.

C. assuming that markets are efficient.

Q. Compared with traditional investments, alternative investments are more likely to have:

B. long-only positions in liquid assets.

C. more transparent and reliable risk and return data.

Q. The privatization of an existing hospital is best described as:

C. an economic infrastructure investment.

The most likely impact of adding commodities to a portfolio of equities and bonds is to:

C. reduce exposure to inflation.

B. provide higher current income.

Q. An equity hedge fund following a fundamental growth strategy uses fundamental analysis to identify companies that are most likely to: (2022 Q16)

C. experience high growth and capital appreciation.

B. be either undervalued or overvalued.

Q. Which of the following is true regarding private equity performance calculations?

B. The IRR calculation involves the assumption of two rates.

A. The money multiple calculation relies on the amount and timing of cash flows.

C. Because private equity funds have low volatility, accounting conventions allow them to use a lagged mark-to-market process.

With regard to commodities, it is most likely true that:

A. exposure is most commonly achieved via commodity derivatives.

B. their returns are based on an income stream such as interest or dividends.

C. they are physical products so most investors prefer to trade the actual commodity.

Q. Which of the following statements about commodity investing is invalid?

C. Commodity indexes are based on the price of physical commodities.

A. Few commodity investors trade actual physical commodities.

B. Commodity producers and consumers both hedge and speculate.

Which of the following most likely belongs in an alternative asset category?

A. A limited partnership that takes long and short positions in publicly traded equity.

B. Equity in an emerging market company that is traded over-the-counter.

C. Securitized commercial real estate debt.

Q. Hedge funds are similar to private equity funds in that both:

A. are typically structured as partnerships.

B. assess management fees based on assets under management.

C. do not earn an incentive fee until the initial investment is repaid.

A disadvantage of a fund of hedge funds as compared to a large multi-strategy fund is:

C. diversified exposure to various hedge fund strategies.

Q. Which of the following statements is true for REITs?

B. Though equity REIT correlations with other asset classes are typically moderate, they are highest during steep market downturns.

A. According to GAAP, equity REITs are exempt from reporting earnings per share.

C. The REIT corporation pays taxes on income, and the REIT shareholder pays taxes on the REIT’s dividend distribution of after-tax earnings.

Q. Private capital is:

B. a source of diversification benefits from both debt and equity.

A. accurately described by the generic term “private equity.”

C. predisposed to invest in both the debt and equity of a client’s firm.

Q. The Sharpe ratio is a less-than-ideal performance measure for alternative investments because:

B. returns of alternative assets are not normally distributed.

A. it uses a semi-deviation measure of volatility.

C. alternative assets exhibit low correlation with traditional asset classes.

Alter 1.11 Test

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

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.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

None

A. 7.8%.

B. 7.4%.

C. 5.8%.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Q. Private equity funds are most likely to use:

A. merger arbitrage strategies.

B. leveraged buyouts.

C. market-neutral strategies.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

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.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

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.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

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.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

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

A. Later stage

B. Formative stage

C. Mezzanine stage

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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:

None

Q. Private equity funds are most likely to use:

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)

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:

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

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

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

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

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