the economics of money, banking, and financial markets

355 #

© 2014 Pearson Canada Inc.#

5. Market-neutral strategies include buying a(n) ____ security and sell ____ of a
   higher valued security
   A) cheap; more
   B) cheap; less
   C) expensive; less
   D) expensive; more
   Answer: A
   Diff: 1 Type: MC Page Ref: 287
   Skill: Recall
   Objective List: 12.6 Examine the role of hedge funds

12.7 Private Equity and Venture Capital Funds

1. 
   

   In a venture capital funds, investors' money is invested in ____.
   A) private equity investments
   B) public company investments
   C) mutual fund investments
   D) government bond investments
   Answer: A
   Diff: 1 Type: MC Page Ref: 287
   Skill: Recall
   Objective List: 12.7 Understanding private equity and venture capital funds

   
   


2. 
   

   Which of the following funds make investments in new startup businesses?
   A) Capital buyout funds
   B) Venture capital funds
   C) Mutual funds
   D) LBO funds
   Answer: B
   Diff: 1 Type: MC Page Ref: 287
   Skill: Recall
   Objective List: 12.7 Understanding private equity and venture capital funds

   
   


3. 
   

   Carried interest is ____.
   A) the fee earned by a private equity fund for management of the equity fund investments
   B) the percentage of profits earned by a private equity fund for management of the equity fund
   investments
   C) the interest charged by a private equity fund for short-selling the equity fund investments
   D) the carry trade profits earned by a private equity fund for swapping the equity fund
   investments
   Answer: B
   Diff: 1 Type: MC Page Ref: 288
   Skill: Recall
   Objective List: 12.7 Understanding private equity and venture capital funds