CIM Alternative Investments Flashcards
6 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CIM Alternative Investments flashcards as text
Commodity investments can serve as an inflation hedge primarily because:
Answer: Their prices tend to rise with general price levels since they are inputs to goods and services
Commodity prices are directly tied to the cost of raw materials, so they naturally tend to increase when inflation rises.
A CIM candidate is analyzing a REIT. Which feature is a defining characteristic of publicly traded REITs?
Answer: They must distribute at least 90% of taxable income to shareholders as dividends
To maintain their tax-advantaged REIT status, companies must distribute at least 90% of taxable income to shareholders annually.
When assessing a client's suitability for alternative investments, which factor is most critical?
Answer: The client's liquidity needs, risk tolerance, and investment horizon
Alternatives often involve lock-up periods and higher risk, so a thorough assessment of the client's liquidity needs, risk profile, and time horizon is essential.
Managed futures funds typically use which type of trading approach?
Answer: Systematic trend-following strategies across multiple futures markets
Most managed futures programs use systematic, rules-based trend-following strategies applied across commodity, currency, equity, and interest rate futures.
The concept of 'dry powder' in private equity refers to:
Answer: Uninvested committed capital available for future investments
Dry powder represents committed but not yet deployed capital that a private equity fund has available to make new investments.
Which of the following is a primary risk specific to infrastructure investments?
Answer: Regulatory and political risk affecting long-term concession agreements
Infrastructure assets such as toll roads and utilities operate under long-term regulatory or concession frameworks, making them vulnerable to political and regulatory changes.