Alternative Investments - Alternative Investments Section 1
- Option : A
- Explanation : A type of private equity fund that invests in established profitable and cash generative companies with solid customer bases, proven products, and high quality management is most likely described as a leveraged buyout.
14. An investor may prefer a fund of funds to a single hedge fund if she:
- Option : A
- Explanation : Funds of funds presumably have some expertise in conducting due diligence on hedge funds and may be able to negotiate more favorable redemption terms than could an individual investor in a single hedge fund.
- Option : B
- Explanation : The management fee for private equity funds is based on committed capital whereas for hedge funds the management fees are based on assets under management.
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