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CAIA Exam 1 Chapter 1 Exam – Questions & Answers
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CAIA Exam 1 Chapter 1 Exam – Questions & Answers
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CAIA Exam 1 Chapter 1 Exam –Questions & Answers
Alternative investments - -Alternative investments are sometimes viewed as
including any investment that is not simply a long position in traditional
investments.
-Fixed-Income Securities - -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 - -Private equity is capital that is not listed on a public
exchange. Private equity is composed of funds and investors that directly
invest in private companies, or that engage in buyouts of public companies,
resulting in the delisting of public equity. Institutional and retail investors
provide the capital for private equity, and the capital can be utilized to fund
new technology, make acquisitions, expand working capital, and to bolster
and solidify a balance sheet.
-Private Debt - -Private debt is the debt accumulated by individuals or
private businesses. Private debt can take numerous forms; a personal loan,
credit card, corporate bond or business loan for instance.
-Traditional Investments - -Typically, traditional investments include
publicly traded equities, fixed-income securities, and cash. For example, if a
particular investment (such as private equity) is not commonly covered as
equity in books on investing, then many people would view it as an
alternative investment.
-Deferred Consumption - -Saving is income not spent, or deferred
consumption.
-Investment - -A good definition of an investment is that it is deferred
consumption. Any net outlay of cash made with the prospect of receiving
future benefits might be considered an investment. So investments can
range from planting a tree to buying stocks to acquiring a college education.
-Institutional Quality Investment - -is the type of investment that financial
institutions such as pension funds or endowments might include in their
holdings because they are expected to deliver reasonable returns at an
acceptable level of risk. For example, a pension fund would consider holding
the publicly traded equities of a major corporation but may be reluctant to
hold collectibles such as baseball cards or stamps.
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