Unit 5: Alternative Investments and Other Assets

Question 1

Limited Partnership

Answer 1

most common form of direct participation program
-income/losses pass through and are considered passive

Question 2

General Partner

Answer 2

one who manages DPP
they have unlimited personal liability

Question 3

Limited Partner

Answer 3

-one who passively invests in DPP
-has limited liability
-subject to regulation risk
-investment must align with LP’s IO

Question 4

Exchange Traded Notes (ETNs)

Answer 4

-debt instrument
-issuer can issue or redeem notes for pricing purposes, potential COI
-credit, market, liquidity, and call risks

Question 5

Inverse/leverage ETFs

Answer 5

Use leverage/derivatives.
they reset daily, they are not a buy & hold product

Question 6

Precious metals

Answer 6

gold, silver, platinum

Question 7

Industrial metals

Answer 7

aluminum, nickel, copper, lead

Question 8

Commodities are correlated to

Answer 8

the inflation rate

Question 9

Animals are considered

Answer 9

a commodity

Question 10

The easiest way to get exposure to commodities

Answer 10

Futures

Question 11

Consumer Durables are not considered

Answer 11

commodities