Exam 17: Alternative Investments

If the seven-month futures contract price for rhodium is currently $12,100 per ounce, what should we expect the current spot price to be if the annual interest rate is 2.2%?

Venture capitalists generally provide funding and expertise to companies at which stages of their development? I. Seed stage II. Early stage III. Formative stage IV. Late stage

Gold is currently trading at $1,645.50 per ounce with a carrying cost of $1.25 per ounce per month for storage and insurance. Given a current market price of $1,693.97 per ounce for a four-month futures contract, what is the potential carry trade profit per ounce if the interest rate is 3%?

Which of the following strategies has a goal of offsetting risk by holding opposite positions in pairs of securities?

The API Fund currently has assets under management of $450 million. If the company uses a 2/20 fee structure, what is the yearly management fee?

A property that is similar to one that you are considering buying has just sold for $393,000 and you estimate that it has an NOI of $70,000. Based on this information, what is the cap rate?

In which one of the following approaches would NOI play an integral role in determining the value of an investment property?

A __________ memorandum details the characteristics of a proposed private equity fund and is distributed to potential investors.

In which order do the following steps in the private equity fund and venture capital fund investment process normally occur? 1. Valuation 2. Deal structure 3. Value creation 4. Deal flow 5. Exit

If the six-month futures contract price for platinum is currently $986.41 per ounce, what should we expect the current spot price to be if the annual interest rate is 3.5%?

If the spot price for platinum is $979.15 per ounce, what should the futures contract price be for a three-month contract at an annual interest rate of 3%?

If the spot price for silver is $18.56 per ounce, what should the futures contract price be for a three-month contract at an annual interest rate of 3.5%?

Washington Capital is conducting its due diligence to determine what ownership fraction it would require in order to provide $18.5 million in venture capital to a small healthcare firm for a four-year period. Washington Capital has a 46% required return and expects the value of the underlying firm to reach $150 million within the next four years. What ownership fraction would Washington Capital require?

Hedge funds may be referred to as __________ return funds, which implies that there is no relative benchmark against which to measure their performance.

Which one of the following is the performance fee earned by the manager of a private equity fund?

What is the estimated value of an office building if the market capitalization rate is 9% and the NOI is $110,000?

You are considering the purchase of a commercial building that is nearby a comparable property that recently sold for $275,000. What is the cap rate for the property you are considering if the comparable property has an NOI of $35,000?

If a hedge fund manager is engaged in trying to profit from global economic changes that have occurred due to government policy changes that affect currencies, interest rates, or commodity prices, which type of strategy is she following?

Which one of the following is the amount of money that an investor has committed to invest in a fund over its entire life?

A commercial building that you are considering investing in has a gross potential income of $205,000 per year and operating costs of $119,000 per year. What is the NOI if the vacancy rate is expected to be 7%?