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Questions and Answers
Why do private equity investments have distinct entry and exit points?
Why do private equity investments have distinct entry and exit points?
- To exercise greater direct control and apply specialized knowledge (correct)
- To rely on market conditions for decision-making
- To avoid investment selection strategies
- To minimize vintage year importance
What contributes to the higher-return opportunities that private equity funds provide?
What contributes to the higher-return opportunities that private equity funds provide?
- Investing in public companies
- Avoidance of leverage
- Use of unreliable indexes
- Influence on portfolio companies' management and operations (correct)
Why is investing in private equity considered riskier than investing in common stocks?
Why is investing in private equity considered riskier than investing in common stocks?
- Because of higher risk factors like illiquidity and leverage (correct)
- Due to heightened volatility
- Due to low returns
- Because of the reliance on reliable indexes
What makes measuring historical private equity performance challenging?
What makes measuring historical private equity performance challenging?
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Why are published private equity indexes considered unreliable measures of performance?
Why are published private equity indexes considered unreliable measures of performance?
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