CSC Alternative Investments 3

Question 1

Which of the following best describes 'infrastructure' as an alternative asset class?

Accepted Answer

Long-lived physical assets like toll roads, airports, and pipelines that generate stable cash flows

Answer

Software startups in early development stages

Answer

Venture capital investments in manufacturing companies

Answer

Short-term trade finance instruments

Question 2

What is 'venture capital' primarily used for?

Accepted Answer

Financing early-stage or growth-stage companies with high return potential

Answer

Buying controlling stakes in mature publicly traded companies

Answer

Trading currency pairs in the foreign exchange market

Answer

Investing in distressed government bonds

Question 3

The Sharpe ratio is used to evaluate alternative investments by measuring:

Accepted Answer

Excess return earned per unit of total risk (standard deviation)

Answer

Total return relative to the benchmark index

Answer

The correlation of returns with the broad equity market

Answer

Maximum drawdown as a percentage of peak value

Question 4

A 'lock-up period' in a hedge fund context refers to:

Accepted Answer

A minimum holding period during which investors cannot redeem their capital

Answer

The period during which a fund's manager cannot trade

Answer

The time required to settle OTC derivative trades

Answer

The freeze on new subscriptions after a fund reaches its target size

Question 5

Which regulatory exemption do most Canadian hedge funds rely on to distribute to investors without a full prospectus?

Accepted Answer

The accredited investor exemption under National Instrument 45-106

Answer

National Instrument 31-103

Answer

The retail investor exemption under NI 81-101

Answer

The CIRO self-regulatory exemption

Question 6

Managed futures funds primarily use which instruments to implement their investment strategies?

Accepted Answer

Exchange-traded futures and forward contracts across multiple asset classes

Answer

Physical commodity stockpiles and direct property ownership

Answer

Convertible bonds and preferred shares

Answer

Private loans to commodity producers