Chapter 9 - Alternative Investments Flashcards

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1
Q

Designed to perform in a manner that is inverse to the index it is tracking.

A

Inverse Exchange Traded Fund

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2
Q

Linked to the performance of a benchmark, but not principal protected.

A

Exchange Traded Note

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3
Q

Similar to an ETF, but its shares are forwarded (once per day).

A

Index Fund

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4
Q

Similar to an index fund, but it shares trade in the market and can be sold short.

A

Exchange Traded Fund

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5
Q

Performs in a direction that’s opposite its benchmark.

A

Inverse Exchange Traded Fund

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6
Q

An investment fund that uses exotic strategies involving derivatives, leverage, and selling short for wealthy, or accredited, investors.

A

Hedge Funds

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7
Q

REITs are not taxed on income if they distribute a minimum of ___%.

A

90%

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8
Q

REITs that invest in both mortgages and properties.

A

Hybrid REITs

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9
Q

General partners have a fiduciary responsibility towards a limited partner(s), what does that mean?

A

The general partner must protect the interest of the partner(s)

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10
Q

If a limited partner negotiates contracts, hire/fire employees, or lend name they could:

A

be subject to unlimited personal liability

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11
Q

A program with speculation on land appreciation and no positive cash flow or depreciation.

A

Raw Land

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12
Q

A program with risks of overbuilding, cost overruns, and long duration.

A

New Construction

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13
Q

A program with previous cash flow, but potential problematic tenant issues.

A

Existing

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14
Q

A program with beneficial tax credits, little chance of appreciation, and high maintenance costs.

A

Low Income

Government Assisted

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15
Q

An oil and gas program with high risk but potential high reward.

A

Exploratory

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16
Q

An oil and gas program where a company drills near an existing field.

A

Developmental

17
Q

An oil and gas program with a combination of exploratory and developmental programs.

A

Balanced

18
Q

An oil and gas program that purchases existing wells and creates immediate cash flows.

A

Income

19
Q

Limited partnerships generally avoid registration by offering securities through:

A

private placements

20
Q

The riskiest real estate program is:

A

raw land

21
Q

Overbuilding is a risk in a _____ limited partnership

A

new construction

22
Q

The riskiest oil and gas program is a(n) _____ program.

A

exploratory