Introduction to Alternative Investments

Question 1

Eight Characteristics that Distinguish Alts from Traditional Investments

Answer 1

Regulatory Factors, Structuring, Trading Strategies, Compensation Structures, Institutional Factors, Information Asymmetries, Incomplete Markets, Innovation

Question 1

2x2 Alt Framework

Answer 1

Enhanced Returns: Hedge Funds (Public), Private Equity/Credit (Private)
Diversification/Risk Mgt: Structured Products (Public), Real Assets (Private)

Question 2

Causes of Irregular Return Distributions

Answer 2

Securities Structuring
Trading Structures

Question 3

Four Main Types of Alt Investment Analysis

Answer 3

Return Computation Methods
Statistical Methods
Valuation Methods
Portfolio Management Methods