Alternative Investments - Alternative Investments Section 1

Avatto>>CFA Level 1>>PRACTICE QUESTIONS>>Alternative Investments>>Alternative Investments Section 1

6. Which of the following is least likely to be considered an alternative investment?

  • Option : C
  • Explanation : Long-only stock funds are typically considered traditional investments and hedge funds and real estate are typically classified as alternative investments
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8. An investor is most likely to consider adding alternative investments to a traditional investment portfolio because of their:

  • Option : C
  • Explanation : A key motivation for investing in alternative investments is their diversifying potential when combined with a traditional portfolio.
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9. Which of the following is least likely to be based on realized profits for a funds’ structure?

  • Option : B
  • Explanation : The management fee, also called the base fee, is based on assets under management.
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