Alternative Investments

7. Compared to traditional investments, alternative investments are less likely to have the following characteristics by:

A. low correlation with traditional investments.

B. high level of regulation.

C. unique legal and tax consideration.

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8.

Analyst 1: Management fees for private equity funds are based on assets under management.

Analyst 2: Private equity funds’ management fees are based on committed capital.

Which analyst’s statement is most likely to be correct?

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9. An investor may favor a portfolio of funds over a single hedge fund if she:

A. seeks better redemption terms.

B. is concerned about extra layer fee structure.

C. is willing and able to make a large initial investment.

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