Caia level 1 2024 - Study guides, Class notes & Summaries

CAIA Practice Questions with correct Answers 2024 What assets are often characterized as traditional by some and alternatives by others in: hedge funds, private equity, and real assets Hedge Funds: Liquid alternative mutual funds Private Equity: Closed-end funds with illiquid holdings Real Assets: Public real estate and public equities of corporations with performance dominated by stable positions in real assets 4 major methods of analysis that distinguish the analysis of alternat...

CAIA Level 1 Glossary Exam Study Guide with Complete Solutions absolute return products - Answer️️ -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. absolute return standard - Answer️️ -An absolute return standard means that returns are to be evaluated relative to z...

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 periods. - a decrease in the purchasing power of a nation's currency. Nominal Price - ANSWER-- refers to the stated price of an asset measured using the contemporaneous values of a currency. Real P...

CAIA Level II Questions and Answers Latest Updated 2024 What advantage do multi-factor models have over single-factor models, such as the Capital Asset Pricing Model? Multi-factor models tend to explain systematic returns much better than do single-factor models. By doing so, multi-factor models are generally believed to produce better estimates of idiosyncratic returns. List the three major categories of factors that drive asset returns. Macroeconomic factors, fundamental/style/invest...

Ex post returns - ANSWER-- are realized outcomes rather than anticipated outcomes ex ante returns - ANSWER-- future possible returns and their probabilities normal distribution - ANSWER-- is the familiar bell shaped distribution, also known as the Gaussian distribution - is symmetric, meaning the left and the right sides are mirror images of each other. - also, it peaks (or clusters) near the center, with decreasing probabilities of extreme events lognormal distribution - ANSWER-- 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 investments exhibit risk and return characteristics that are acceptable to institutional investors. Institutional investors have risk and return objectives that prevent them from investing in very small or high...

CAIA Level 2 Exam Study Guide with Complete Solutions Meta risks are qualitative risks not captured by specific and measurable financial risks. events. - Answer️️ -They include organizational and human behavior, moral hazard, the misuse and excessive dependence on quantitative methods, market interaction, and extreme capital market A distressed securities strategy is most likely to earn returns from liquidity risk. - Answer️️ -Global macro and equity long/short are most likely to ...

CAIA Level 1 Exam 2024 Define investment - answer-Investment is deferred consumption List the four major types of real assets other than land and other types of real estate. - answer-Natural resources, commodities, infrastructure, and intellectual property. List the three major types of alternative investments other than real assets in the CAIA curriculum. - answer-Hedge funds, Private Equity, and Structured Products Name the five structures that differentiate traditional and alternative i...