What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Alternative Investments
1. Alternative Investment Features, Methods, and Structures practice questions
1. Alternative Investment Features, Methods, and Structures is part of CFA Level I Alternative Investments. Alternative Investments questions emphasize private capital, real estate, infrastructure, natural resources, hedge funds, digital assets, and performance measurement. Use this page to review the controlling ideas, then work through 9 questions with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Alternative Investments
1. Alternative Investment Features, Methods, and Structures
An investment is best classified as an alternative investment when it is:
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1. Alternative Investment Features, Methods, and Structures
Compared with a fund investment, a direct investment in an alternative asset most likely provides the investor with:
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1. Alternative Investment Features, Methods, and Structures
In a typical limited partnership alternative investment structure, the general partner is best described as the party that:
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1. Alternative Investment Features, Methods, and Structures
A pension plan has committed to a private equity fund and is invited to invest directly alongside the fund in one portfolio company, paying reduced fees on that additional exposure. This invitation is best described as:
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1. Alternative Investment Features, Methods, and Structures
A hedge fund requires investors to keep capital invested for one year after subscription and then provide 60 days of written notice before redeeming. The one-year requirement is best described as:
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1. Alternative Investment Features, Methods, and Structures
A private capital fund has committed capital of USD80 million. During the investment period, the management fee is 1.5% of committed capital. The fund has called USD50 million and invested USD46 million. The annual management fee is closest to:
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1. Alternative Investment Features, Methods, and Structures
A fund-of-funds invests USD100 million in underlying hedge funds. The underlying funds report an 8.0% net return to the fund-of-funds before fund-of-funds fees. The fund-of-funds charges a 1.0% management fee on beginning assets and a 10% incentive fee on gains remaining after its management fee. The net return to the end investor is closest to:
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1. Alternative Investment Features, Methods, and Structures
An alternative investment fund has a hurdle rate, a high-water mark, and a clawback provision. The provision most directly intended to prevent the manager from being paid twice for recovering prior losses is the:
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1. Alternative Investment Features, Methods, and Structures
For an investor comparing fund investment, co-investment, and direct investment in infrastructure, the most accurate ranking from least investor control to greatest investor control is:
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