Alternative Investments - Alternative Investments Section 1

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16. Which of the following investments is most suitable for an investor looking for competitive long-term total return driven by both income generation and capital appreciation?

  • Option : B
  • Explanation : One of the key reasons for investing in real estate is the potential for competitive long-term total returns driven by both income generation and capital appreciation.
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17. If capital is provided to companies moving towards operations but before commercial production and sales have occurred, then it is most likely:

  • Option : C
  • Explanation : Early stage financing (early stage venture capital) is provided to companies moving toward operation but before commercial production and sales have occurred.
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18. Venture capital entails investing in:

  • Option : C
  • Explanation : Venture capital entails investing in private companies with high growth potential.
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19. Which of the following is least likely the characteristic of an attractive target company for a leveraged buyout?

  • Option : C
  • Explanation : Characteristics of an attractive target company for LBOs include: undervalued or depressed stock price, willing management, inefficient companies, strong and sustainable cash flows, low leverage, and significant amount of physical assets.
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