CAIA CAIA Alternative Investment Vehicles

Question 1

What is a Special Purpose Vehicle (SPV) primarily used for in alternative investments?

Accepted Answer

To isolate assets and liabilities for a specific transaction or investment

Answer

To consolidate tax filings across funds

Answer

To register hedge funds with the SEC

Answer

To distribute dividends to retail investors

Question 2

Which structure is most commonly used by US-domiciled hedge funds to accommodate tax-exempt domestic investors?

Accepted Answer

Limited partnership onshore feeder

Answer

Offshore feeder fund

Answer

Master-feeder structure

Answer

Business development company

Question 3

A Business Development Company (BDC) is required to invest at least what percentage of its assets in qualifying assets?

Accepted Answer

70%

Answer

50%

Answer

60%

Answer

80%

Question 4

Which of the following best describes a Interval Fund structure?

Accepted Answer

A fund that offers periodic but limited liquidity windows rather than daily redemptions

Answer

A closed-end fund that lists on a stock exchange

Answer

A mutual fund that invests exclusively in interval options

Answer

A hedge fund with a 10-year lock-up period

Question 5

In a fund-of-funds structure, the primary benefit to investors is:

Accepted Answer

Diversification across multiple underlying managers

Answer

Elimination of management fees

Answer

Direct ownership of individual securities

Answer

Guaranteed capital preservation

Question 6

A Real Estate Investment Trust (REIT) must distribute at least what percentage of taxable income to maintain its tax-advantaged status?

Accepted Answer

90%

Answer

75%

Answer

85%

Answer

95%