Alternative Investments - Alternative Investments Section 1
- 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.
- 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.
18. Venture capital entails investing in:
- Option : C
- Explanation : Venture capital entails investing in private companies with high growth potential.
- 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.
20. Which of the following is the most accurate description of contango?
- Option : B
- Explanation : Backwardation is a situation where the spot price exceeds the forward or futures price. The opposite is true for contango.
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