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1. Which of the following actions is MOST accurately associated with tactical asset allocation? A. Investment decisions with a long term perspective B. Investment decisions that do not emphasize current market conditions C. Investment decisions with a primary goal of maximizing retum D. Investment decisions that do not depend on ability to diversity 2. Which of the following sets of investment categories or products is MOST accurately described as being driven by beta rather than alpha? A. Enhanced index and 130/30 funds B. Enhanced index and long/short investing C. Passive index and nonlinear retums D. Passive index and absolute retums. 3. Commodity futures can hedge against inflationary more effectively because A. commodity futures have high volatility. B. commodity futures have lower Sharpe ratio. C. commodity futures have higher retums. D. commodity futures and inflation are positively correlated. 4. The first stage of financing for venture capital firms to participate in a start-up company investment is called A. early stage financing B. fund raising C. seed financing D. investment sourcing 5. The J-curve effect tells us that when we compare LBO fiinds to other LBO funds, we have to look for a similar: A. exit strategy B. vintage year. C. financing strategy D. economic value added. 6. Which of the following is most likely NCORRECT regarding mezzanine financing, high yield bonds, and leveraged loans? A. High yield bonds and mezzanine debt are fixed rate, while leveraged loans are floating rate. B. Leveraged loans have the longest terms followed by mezzanine debt and then high yield bonds. C. High yield bonds and mezzanine debt have a claim on the borrower's assets, while leveraged loans are secured. D. Leveraged loans have the lowest recovery rates in default followed by high yield bonds and then mezzanine debt. 7. Which of the followings is an investment objective for real estate? A. Portfolio concentration. B. Provide substantial cash flows. C. Provide a retum similar to the risk-free rate. D. Negatively correlated with inflation

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