Question 1

Which is the round of funding where the business should be generating some external revenue?

Accepted Answer

A)  start-up capital 
B)  development capital 
C)  expansion capital 
D)  exit

Question 2

Private equity funds:

Accepted Answer

A)  are not the same, but similar to venture capital 
B)  are the same as venture capital 
C)  require less trust in the fund's management to select appropriate projects 
D)  all of these choices

Question 3

What is the average performance fee for a hedge fund in Australia?

Accepted Answer

A)  $ 6 \% $ 
B)  $ 10 \% $ 
C)  $ 14 \% $ 
D)  $ 18 \% $

Question 4

Once adjusted for risk,the beta estimate of venture capital firms is approximately:

Accepted Answer

A)  $ 0.7$ 
B)  $ 1.0 $ 
C)  $ 1.4 $ 
D)  $ 1.7$

Question 5

Business ideas need money,and it is easiest for a business to try to raise money through a public float.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a stage in the private equity life cycle?

Accepted Answer

A)  inception stage 
B)  angel stage 
C)  intermediate stage 
D)  none of the above

Question 7

Which of the following are characteristics of a hedge fund?
I.Pooling of assets
II.Strict regulatory oversight by the SEC
III.Investing in equities,debt instruments,and derivative instruments
IV.Professional management of assets

Accepted Answer

A) I and II only 
B) II and III only 
C) III and IV only 
D) I,III,and IV only

Question 8

The venture capital stage often involves several tranches of financing in which the amount of the investment and the number of investors grows.

Accepted Answer

A) True 
 B)False

Question 9

Brav and Gompers (1997)analyse the short-run performance of venture-backed IPOs in comparison to non-venture-backed IPOs.

Accepted Answer

A) True 
 B)False

Question 10

Biotech firms that make it through to a public float generally undergo how many rounds of venture capital financing?

Accepted Answer

A) 1 
B) 3 
C) 4 
D) 5

Question 11

From a portfolio perspective,infrastructure assets are regarded as _________risk,but offering a return.

Accepted Answer

A)  Low, high 
B)  High, low 
C)  Low, low 
D)  High, high

Question 12

The distribution of returns to venture capital is:

Accepted Answer

A)  normal 
B)  positively skewed 
C)  negatively skewed 
D)  binomial

Question 13

Which of the following is type of private equity investors?

Accepted Answer

A)  Internal investors who might best be regarded as entrepreneurs who create the business and typically invest both their effort and money 
B)  External investors who typically invest funds at a later stage of the business life cycle. 
C)  Both of these choices 
D)  None of these choices

Question 14

Which capital is generally the largest of the venture capital fund-raising rounds?

Accepted Answer

A)  start-up capital 
B)  development capital 
C)  expansion capital 
D)  exit

Question 15

Private equity returns are difficult to estimate due to the fact:

Accepted Answer

A)  that there is no direct or required form of disclosure of returns 
B)  both $ A $ and $ C $ 
C)  that private equity is not as frequently traded 
D)  none of the above

Question 16

Which factor did Guo,Lev and Zhou (2005)find plays an important role in the success of a venture capital?

Accepted Answer

A)  quality of the underwriter 
B)  product-related fundamentals 
C)  intellectual property fundamentals 
D)  all of these choices

Question 17

By the end of the 1990s,private equity was worth almost ___ in the USA.

Accepted Answer

A)  AUD 8 trillion 
B)  USD 8 billion 
C)  AUD 18 trillion 
D)  USD 8 trillion

Question 18

The seminal study of Moskowitz and Vissing-Jørgensen (2002),which has estimated rates of return to private equity in the USA over the 1990s,reports that returns to private equity over the early 1990s were 12.3% p.a.

Accepted Answer

A) True 
 B)False

Question 19

Alternative investments (AI)do not generally represent an asset class that tends to be restricted to professional fund managers and very large private investors.

Accepted Answer

A) True 
 B)False

Question 20

The long-short strategy is one of the most common strategies in the hedge fund industry and relies upon:

Accepted Answer

A)  reducing risk 
B)  outperformance 
C)  performance fees 
D)  market mispricing

Exam 18: Alternative Investments

Which is the round of funding where the business should be generating some external revenue?

Private equity funds:

What is the average performance fee for a hedge fund in Australia?

Once adjusted for risk,the beta estimate of venture capital firms is approximately:

Business ideas need money,and it is easiest for a business to try to raise money through a public float.

Which of the following is not a stage in the private equity life cycle?

Which of the following are characteristics of a hedge fund? I.Pooling of assets II.Strict regulatory oversight by the SEC III.Investing in equities,debt instruments,and derivative instruments IV.Professional management of assets

The venture capital stage often involves several tranches of financing in which the amount of the investment and the number of investors grows.

Brav and Gompers (1997)analyse the short-run performance of venture-backed IPOs in comparison to non-venture-backed IPOs.

Biotech firms that make it through to a public float generally undergo how many rounds of venture capital financing?

From a portfolio perspective,infrastructure assets are regarded as _________risk,but offering a return.

The distribution of returns to venture capital is:

Which of the following is type of private equity investors?

Which capital is generally the largest of the venture capital fund-raising rounds?

Private equity returns are difficult to estimate due to the fact:

Which factor did Guo,Lev and Zhou (2005) find plays an important role in the success of a venture capital?

By the end of the 1990s,private equity was worth almost ___ in the USA.

The seminal study of Moskowitz and Vissing-Jørgensen (2002),which has estimated rates of return to private equity in the USA over the 1990s,reports that returns to private equity over the early 1990s were 12.3% p.a.

Alternative investments (AI)do not generally represent an asset class that tends to be restricted to professional fund managers and very large private investors.

The long-short strategy is one of the most common strategies in the hedge fund industry and relies upon: