CFA DOMAIN 10: Alternative Investments

A new hedge fund is formed, and the managing principals seed the fund with €10 million. During the initial marketing phase, the hedge fund receives €50 million in capital commitments and the fund is launched. At the end of Year 1, total assets under management are €25 million. The management fee for Year 1 is most likely calculated on:

Risk management "best practices" dictate that greenfield infrastructure construction risk mitigation should most likely include:

In commodity futures markets, futures prices are more likely to be in contango when:

An investor most appropriately uses the Sharpe ratio as the risk-adjusted return measure for a hedge fund when the fund's:

A feature of mezzanine debt is that it most likely:

At the time of a merger announcement, a hedge fund manager purchases stock of the target company and shorts the stock of the acquirer. Which type of hedge fund strategy best characterizes this approach?

Which of the following is most likely a limitation of using appraisal indexes to measure returns to real estate?

Compared to investing in a single hedge fund, which of the following is most likely an advantage of investing in a fund-of-funds?

The high-water mark used for incentive fee calculation is most likely based on a fund's:

If venture capitalists are investing in a company by providing funds to initiate commercial production, which of the following best describes the company's financing stage?

At year-end, a private equity fund has returned 10% and has an 8% hurdle rate and a 20% performance fee with a catch-up clause. Based on only this information, the performance fee earned by the general partner is closest to:

A portfolio manager is seeking an alternative investment to diversify a pension portfolio. If the investment is actively managed, liquid, and a variant of a global macro strategy, it is most likely a:

Which of the following best describes an attractive feature of unitranche private debt?

A small private equity fund is looking to exit a large investment at the highest potential valuation while generating positive publicity. Which of the following exit strategies is most appropriate for the fund?

An investor is conducting due diligence on a hedge fund. Which of the following is most likely to be readily available? Information on the fund's:

Which measure of private equity industry performance is most likely to be overstated?

Compared with an individual hedge fund, a fund of funds will more likely:

Using internal models to value the assets in a fund's portfolios is most likely for which of the following?

A private equity fund with a leveraged buyout focus is most likely to invest in:

Within the context of a new hedge fund, which of the following best describes founders' shares? Founders' shares entitle early fund investors to: