chapter 5

Question 1

Real estate investment trust (REIT)

Answer 1

An actively managed pool of capital that invests in real-estate-related assets, combing professional management, diversification, exchange-trading and tax benefits

Question 2

Pass-through vechile

Answer 2

an investment vehicle, such as a direct participation that pays out all income and losses to investors, therefore avoiding double taxation of earnings

Question 3

direct participation program (DPP)

Answer 3

a business entity, for example, a limited partnership, that passes through all gains and losses to investors, therefore avoiding double taxation of earnings

Question 4

Limited Partnership (LP)

Answer 4

a type of direct participation program, which includes investments from general partners, who actively manage and take full liability for the business, as well as limited partners, who have limited liability and are not involved in day to day management

Question 5

Master limited partnership ( MLP)

Answer 5

a special type of limited partnership that is publicly traded

Question 6

hedge fund

Answer 6

a professionally managed investment vehicle that uses aggressive trading strategies to generate higher returns at the risk of heightened losses and is therefore typically only appropriate for sophisticated , high net worth individuals and intuitional investors

Question 7

exchange-traded note (ETN)

Answer 7

an unsecured debt instrument whos return is tied to the performance of an equity security or market

Question 8

Municipal fund security

Answer 8

a pool of invested capital, similar to a mutual fund, that is issued by a government equity