CAIA Level 1 - Chapter 1: What is an Alternative Investment? With Complete Solutions

CAIA Level 1 - Chapter 1: What is an Alternative Investment? With Complete SolutionsCAIA Level 1 - Chapter 1: What is an Alternative Investment? With Complete SolutionsCAIA Level 1 - Chapter 1: What is an Alternative Investment? With Complete Solutions Absolute Return Products - ANSWER-- Return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation, expressed as a percentage, that an asset, such as a stock or a mutual fund, achieves over a given period of time. - 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 Absolute Return Standard - ANSWER-Returns are to be evaluated relative to zero, a fixed rate, or relative to the risk less rate, and therefore independently of performance in equity markets, debt markets or any other market. Passive Investing - ANSWER-investing is an investment strategy to maximize returns by minimizing buying and selling. benchmark - ANSWER-A performance standard for a portfolio that reflects the preferences of an investor with regard to risk and return Active Risk - ANSWER-The risk that causes a portfolio return to deviate from the return of a benchmark due to active management.