CAIA- Chartered Alternative Investment Analyst Exam Bundle Graded A+

What assets are often characterized as traditional by some and alternatives by others in: hedge funds, private equity, and real assets -Answer- Hedge Funds: Liquid alternative mutual funds Private Equity: Closed-end funds with illiquid holdings Real Assets: Public real estate and public equiti...

5th percentile vs 25th percentile performance - Answer-5th percentile managers outperform in every comparison BUT 25th percentile managers' performance is more volatile --> even if 25th percentile managers outperform they tend to mean revert --> demonstrates the perils of choosing managers ba...

Rebalancing activity - Answer-can be seen as a short strangle trade Short strangle = out-of-the-money calls and out-of-the-money puts are sold. Corpus - Answer-the nominal value of the endowment's initial gift advantages that may explain the outperformance enjoyed by endowments - Answer-1. A...

Which of the following investments is most likely to be considered an institutional quality alternative investment? A. Vintage Wine Collection B. Long/Short Equity Hedge Fund C. High-Yield Corporate Bond Fund D. Small Cap Equity Index Fund -Answer- B. Institutional-quality alternative investment...

absolute return products - Answer-Absolute return products are investment products viewed as having little or no return correlation with traditional assets, and have investment performance that is often analyzed on an absolute basis rather than relative to the performance of traditional investments...

6 types of private equity - Answer-Equity PE - venture capital - buyouts - merchant banking Debt PE - mezzanine debt (debt / equity hybrid for middle market companies) - distressed debt - leveraged loans (noninvestment grade LIBOR + 1.25% Criteria for distressed debt - Answer-Equal to CCC ...

4 types of alternative assets - Answer-Alternatives are defined by inclusion: Real Assets Hedge Funds Private Equity Structured products Real Assets - Answer-Direct ownership of non financial assets: - natural resources - commodities - real estate - land - infrastructure - IP (intellect...

Inflation - Answer-- a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. - It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior period...

Module 7 - Structure, Categories & Biases - Answer-90% How are hedge fund databases populated and what is the implication of that process? A) Hedge fund managers required to report performance, which allows us to see complete information on hedge fund industry assets B) Hedge fund managers re...

An asset-pricing model that attempts to explain how investors should behave is a(n): - Answer-normative model. Normative models attempt to explain how investors should behave. Positive models attempt to explain how investors do behave. Theoretical models use assumptions and logic, while empirical...

CAGR - Answer-compound annual growth rate annualized return - Answer-(1+HPR)^number of holding periods in one year - 1 multiple hedge fund aggregation - Answer-equal weighted approach, asset weighted, and arbitrary weight approach Performance index - Answer-R index = Sum of wi * Ri in th...

Why are commodities often viewed as an asset class that helps diversify portfolio of traditional assets? - Answer-Commodities has lack of return correlation with traditional assets Define nominal price - Answer-Nominal price refers to the stated price of an asset measured using the contemporaneou...

Equity long/short funds - Answer-- tend to have net positive systematic risk exposure from taking a net long position, with the long positions being larger than the short positions. Equity Market-neutral funds - Answer-- attempt to balance short and long positions, ideally matching the beta expos...

Distinguish discretionary fund trading from systematic fund trading - Answer-Discretionary fund trading is where the decisions of the investment process are made directly by the judgment of human traders. • Systematic fund trading, often referred to as black-box model trading because the details...