Private Equity Investments and Ownership Capital Returns
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Questions and Answers

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?

  • 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?

  • 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?

    <p>Presence of survivorship, backfill, and other biases</p> Signup and view all the answers

    Why are published private equity indexes considered unreliable measures of performance?

    <p>Subject to survivorship, backfill, and other biases</p> Signup and view all the answers

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