Caia chapter 1 2024 Study guides, Class notes & Summaries

CAIA Exam 1 Chapter 1 Questions and Answers 100% Correct | Updated 2024

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...

Alternative investments - ANSWER-Alternative investments are sometimes viewed as including any investment that is not simply a long position in traditional investments. Fixed-Income Securities - ANSWER-A fixed income security is an investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. Private equity - ANSWER-Private equity is capital that is not listed on a public exchange. Private equity is composed of funds and investor...

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...

Define investment - ANSWER-Investment is deferred consumption. List 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, Structured Products Name the five structures that differentiate traditional and alternative investments - ANSWER-Regulatory...