Professional Documents
Culture Documents
ALTERNATIVE
INVESTMENTS
40 QUESTIONS
TIME: 60 MINS
1.
116.
2.
117.
3.
118.
4.
119.
Because of survivorship bias, hedge fund data are most likely to:
A. overstate returns and overstate risk.
B. overstate returns and understate risk.
C. understate returns and overstate risk.
120.
5.
6.
116.
For the valuation of real estate investment trusts (REITs), the assetbased approach estimates value by:
A. subtracting recurring capital expenditures from funds from
operations.
B. adding depreciation, subtracting gains from property sales, and
8.
118.
The period of time during which a private equity fund will select
investments and direct committed capital to them is best described as
a:
A. notice period.
B. lockup period.
C. drawdown period.
9.
119.
10. Assume most hedge funds have a 2-and-20 fee structure and most
120.
funds of funds have a l-and-l0 fee structure. Over a long,investment
horizon, compared to net returns from investing directly In hedge
funds, net returns from investing in funds of funds are most likely to
be:
A. lower.
B. higher.
C. the same.
11.
116.
12.
117.
13.
118.
14.
119.
15.
120.
116.
117.
118.
119. The effect of survivorship bias on hedge fund risk and returns from
18. historical results is to overstate:
A. both risk and expected returns.
B. expected returns and understate risk.
C. risk and understate expected returns.
120.
20.
21.
22.
1I 8. Measures of downside risk such as the Sortino ratio are most likely to
be more appropriate than standard deviation for measuring risk of a:
A. macro strategy fund.
B. real estate investment trust.
C. commodity exchange-traded fund.
23.
119. Arkex Funds is a hedge fund with a value of $100 million at the
beginning of the year. Arkex Funds charges a 2.0% management fee
based on assets under management at the beginning of the year and a
20.0% incentive fee with a 5.0% hard hurdle rate. Incentive fees are
calculated net of management fees. The value of the fund at the end
24. of the year before fees is $110 million. The net return to investors is
closest to:
A.6.8%.
B. 7.4%
C.8.0%.
120.
26.
27.
28.
Exam 3
Afternoon Session
118.
A hedge fund started the year with a value of El2S million. At year's
end the value before fees is ISO million. The fund charges 2 and 20
with management fees calculated on end-of-year values. Incentive fees
are netof management fees and calculated using a 10% hard hurdle
.rate. Total fees paid for this year are closest to:
A. 4.9 million.
29.
B. 5.5 million.
C. 7.4 million.
119.
120.
32.
33.
34.
35.
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36.
37.
38.
39.
40.