CIM CIM Alternative Investments 3

Question 1

Commodity investments can serve as an inflation hedge primarily because:

Accepted Answer

Their prices tend to rise with general price levels since they are inputs to goods and services

Answer

Commodities pay fixed coupon payments linked to CPI

Answer

Commodity funds are guaranteed by the U.S. government

Answer

Futures contracts have no expiration dates

Question 2

A CIM candidate is analyzing a REIT. Which feature is a defining characteristic of publicly traded REITs?

Accepted Answer

They must distribute at least 90% of taxable income to shareholders as dividends

Answer

They are exempt from all federal income taxes without conditions

Answer

They can only invest in residential properties

Answer

They are closed to new investors after the initial offering

Question 3

When assessing a client's suitability for alternative investments, which factor is most critical?

Accepted Answer

The client's liquidity needs, risk tolerance, and investment horizon

Answer

The client's preference for daily account statements

Answer

Whether the client owns any index mutual funds

Answer

The current yield on 10-year Treasury bonds

Question 4

Managed futures funds typically use which type of trading approach?

Accepted Answer

Systematic trend-following strategies across multiple futures markets

Answer

Buy-and-hold strategies focused on dividend income

Answer

Fundamental equity analysis of individual companies

Answer

Arbitrage between spot and forward currency markets exclusively

Question 5

The concept of 'dry powder' in private equity refers to:

Accepted Answer

Uninvested committed capital available for future investments

Answer

Losses realized from failed portfolio companies

Answer

Management fees earned but not yet distributed

Answer

Leverage borrowed against existing portfolio holdings

Question 6

Which of the following is a primary risk specific to infrastructure investments?

Accepted Answer

Regulatory and political risk affecting long-term concession agreements

Answer

Daily mark-to-market volatility

Answer

Short settlement cycles

Answer

High correlation with short-term interest rates