Question 1

Which of the following rely on the services of a prime broker?

Accepted Answer

A)  Hedge funds 
B)  Venture capital funds 
C)  Private equity funds 
D)  All of the above 
A)  Hedge funds 
B)  Venture capital funds 
C)  Private equity funds 
D)  All of the above A

Question 2

Hedge, venture capital, and private equity funds are typically organized as

Accepted Answer

A)  Corporations 
B)  Trusts 
C)  Sole proprietorships 
D)  Limited partnerships 
A)  Corporations 
B)  Trusts 
C)  Sole proprietorships 
D)  Limited partnerships D

Question 3

Acting to align fund manager compensation with the interests of other investors is

Accepted Answer

A)  Managers hold shares in the fund-have "skin" in the game 
B)  A management fee is based on assets under management 
C)  A performance fee based on returns on the assets under management in excess of a benchmark 
D)  All of the above 
A)  Managers hold shares in the fund-have "skin" in the game 
B)  A management fee is based on assets under management 
C)  A performance fee based on returns on the assets under management in excess of a benchmark 
D)  All of the above D

Question 4

Which of the following type of fund poses the most serious threat to financial stability?

Accepted Answer

A)  Hedge funds 
B)  Venture capital funds 
C)  Private equity funds 
D)  All pose the same degree of risk 
A)  Hedge funds 
B)  Venture capital funds 
C)  Private equity funds 
D)  All pose the same degree of risk

Question 5

When hedge funds take actions that bring asset values into closer alignment with economic fundamentals

Accepted Answer

A)  Resources are more effectively guided to where they are valued most 
B)  Monetary policy goals are better achieved 
C)  Investors earn above-market returns 
D)  All of the above 
A)  Resources are more effectively guided to where they are valued most 
B)  Monetary policy goals are better achieved 
C)  Investors earn above-market returns 
D)  All of the above

Question 6

The use of leverage by hedge and private equity funds

Accepted Answer

A)  Magnifies the returns to investors 
B)  Adds to the fund's risk profile 
C)  Can add to discipline on fund managers from creditors 
D)  All of the above 
A)  Magnifies the returns to investors 
B)  Adds to the fund's risk profile 
C)  Can add to discipline on fund managers from creditors 
D)  All of the above

Question 7

A vibrant venture capital sector affects macroeconomic performance by

Accepted Answer

A)  Adding to the skills of the labor force 
B)  Increasing the level of investment 
C)  Increasing the rate of productivity growth 
D)  None of the above 
A)  Adding to the skills of the labor force 
B)  Increasing the level of investment 
C)  Increasing the rate of productivity growth 
D)  None of the above

Question 8

A hedge fund will contribute to market volatility

Accepted Answer

A)  If it is making profit for its investors 
B)  If it is making losses for its investors 
C)  If its returns track market returns 
D)  If its managers actively manage its portfolio 
A)  If it is making profit for its investors 
B)  If it is making losses for its investors 
C)  If its returns track market returns 
D)  If its managers actively manage its portfolio

Question 9

Common types of exit for venture capital and private equity investments is

Accepted Answer

A)  Initial public offerings (IPOs) 
B)  Acquisitions by other firms 
C)  Liquidation 
D)  Both a and b 
A)  Initial public offerings (IPOs) 
B)  Acquisitions by other firms 
C)  Liquidation 
D)  Both a and b

Question 10

The venture capital industry places a great deal of focus on which sector of the economy?

Accepted Answer

A)  Firms engaged in international trade 
B)  Technology firms-information and biotech 
C)  Capital goods producers 
D)  Consumer goods producers 
A)  Firms engaged in international trade 
B)  Technology firms-information and biotech 
C)  Capital goods producers 
D)  Consumer goods producers

Question 11

In which type of fund do investors make the longest-term commitment of their funds?

Accepted Answer

A)  Hedge funds 
B)  Mutual funds 
C)  Private equity funds 
D)  The commitment is roughly the same for each 
A)  Hedge funds 
B)  Mutual funds 
C)  Private equity funds 
D)  The commitment is roughly the same for each

Question 12

Venture capital funds contribute to economic value by

Accepted Answer

A)  Screening start-up and early-stage firms that are more likely to develop products that meet the market test 
B)  Providing financing for expansion 
C)  Providing business and managerial expertise 
D)  All of the above 
A)  Screening start-up and early-stage firms that are more likely to develop products that meet the market test 
B)  Providing financing for expansion 
C)  Providing business and managerial expertise 
D)  All of the above

Which of the following rely on the services of a prime broker?

Hedge, venture capital, and private equity funds are typically organized as

Acting to align fund manager compensation with the interests of other investors is

Which of the following type of fund poses the most serious threat to financial stability?

When hedge funds take actions that bring asset values into closer alignment with economic fundamentals

The use of leverage by hedge and private equity funds

A vibrant venture capital sector affects macroeconomic performance by

A hedge fund will contribute to market volatility

Common types of exit for venture capital and private equity investments is

The venture capital industry places a great deal of focus on which sector of the economy?

In which type of fund do investors make the longest-term commitment of their funds?

Venture capital funds contribute to economic value by

Introduction

Overview of the Financial System

The Special Role of Commercial Banks

Factors Affecting Yields

Principles of Portfolio Selection and Efficient Markets

The Money Market

The Bond Market

Securitization

The Mortgage Market

The Equity Market

Central Banking and the Federal Reserve

Monetary Policy: The Basics

Monetary Policy: Challenges Faced by Policymakers

Financial Crises

The Foreign Exchange Market and Exchange Rate Regimes

Depository Institutions

The Pricing of Financial Assets

Mutual Funds

Large Institutional Investors

Filters

Exam 19: Hedge, Venture Capital, and Private Equity Funds

Which of the following rely on the services of a prime broker?

Hedge, venture capital, and private equity funds are typically organized as

Acting to align fund manager compensation with the interests of other investors is

Which of the following type of fund poses the most serious threat to financial stability?

When hedge funds take actions that bring asset values into closer alignment with economic fundamentals

The use of leverage by hedge and private equity funds

A vibrant venture capital sector affects macroeconomic performance by

A hedge fund will contribute to market volatility

Common types of exit for venture capital and private equity investments is

The venture capital industry places a great deal of focus on which sector of the economy?

In which type of fund do investors make the longest-term commitment of their funds?

Venture capital funds contribute to economic value by

Introduction

Overview of the Financial System

The Special Role of Commercial Banks

Factors Affecting Yields

Principles of Portfolio Selection and Efficient Markets

The Money Market

The Bond Market

Securitization

The Mortgage Market

The Equity Market

Central Banking and the Federal Reserve

Monetary Policy: The Basics

Monetary Policy: Challenges Faced by Policymakers

Financial Crises

The Foreign Exchange Market and Exchange Rate Regimes

Depository Institutions

The Pricing of Financial Assets

Mutual Funds

Large Institutional Investors

Filters