Chapter 12 Flashcards
What’s the Hedge ratio?
Share price cie acquired/share price of acquirer
Managed futures fund is done by
Managers of commodity trading advisor (CTA)
Income earned by the REIT is distributed
In kind, interest as is and capital as is
High yield bonds use of leverage
Little or no leverage , no add risk
Amount of leverage in a mutual fund disclosed
On a real time basis
Convertible arbitrage hedge with ?
Shorting amount of shares
Disadvantage of alternative investments
Performance distribution
LBO is a :
Private equity includes leverage buyout, mezzanine capital, venture capital, investment infrastructure
What is a measure of the variation of the asset class return from the normal distribution?
Skewness and kurtosis
How big is the L/S equity strategy in Canada?
75% of HF activity
Mezzanine capital definition
HY unsecured prefered equity or subordinated loans
Convertible bonds behave like?
Equities when they are convertible into isssuer’s share trading at more than the conversion price
Commodities have
A positive correlation with inflation
With the equity market neutral strategy the PF manager chooses:
The right stock long and short, not the direction of the market
Private equity is typically raised
Through limited partnership offering, the promoters are the general partner while the investors are the limited partners
In a merger or risk arbitrage strategy
The manager will short the shares of the acquirer and go long with the acquiered
Relative Value
RV make Fantastic Camping Equipment, (fixed income arbitrage,convertible arbitrage, equity market neutral)
Event-Driven
Mom rides Harley Davidson (merger arbitrage, risk arbitrage, high yield bond, distressed securities)
Directional
Get extra marks learning directional(globa macro,emerging market, managed futures, long/short equity, dedicated short bias)
