Caia Level 1
Caia Level 1 Questions
Caia Level 1 Questions
Set of flashcards Details
| Flashcards | 253 |
|---|---|
| Language | English |
| Category | Finance |
| Level | Other |
| Created / Updated | 10.02.2016 / 13.06.2022 |
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Arbitrage: simultaneous purchase and sale of indentical positions trading at different prices in different markets. Return enhancers: primary obejctive is superior average returns Return diversifiers: primary objective is reduction of portfolio risk
investments that exhibit risk and return characteristics that are acceptable to institutional investors (not very small or highly speculative)
- real estate - timberland - infrastructure investments - intangible assets
- ownership of the physical commodity - forwards and futures - securities of commodity producing firms - ETFs
Lumpy assets
- fewer participants - lower competition - higher transaction costs - inability to go short
- return computation methodology - valuation methodology - statistical methodology - portfolio management methodology
- Buy -Side Institutions - Sell -Side Institutions - Outside Service Providers
- plan sponsor - foundation - endowment - family office - sovereign / non -federal funds - alternative investments funds - seperately managed accounts SMAs
- dealer banks - retail brokers
- Prime broker - Auditors/accountants - Attorneys - Fund administrators - Hedge fund infrastructure - Consultants - Depositories/custodians - Commercial banks
In call markets, the stock is only traded at specific times. In continiuous markets, trades occur at any time the market is open
the third market
fourth market
- marketing and distribution regulations - establishment regulations - operational regulations - management regulations
(1) securities must be sold only to US accredited investors (2) seburities must not be marketed to the public
Section 3(c)(1) hedge funds has 100 or fewer investors in the fund Section 3(c)(7) hedge fund has fewer than 500 super -accredited investors in the fund
that only 50% of the value of a security can be purchased on margin
In the development, a real estate is improve / created and real estate development is significantly associated with uncertainty
1. Acquiring land 2. Forecasting revenues / costs 3. Deisgning the building 4. Approving through government 5. Raising capital 6. Building 7. Leasing
DCF
- market conditions - demand for space - competing developments - overall supply - quality of the building - time
potential gross inccome - vacancy losses (vacancy loss rate x petential gross income) = effective gross income - operating expenses (fixed and variable expenses) = NOI
Terminal Value
both higher
after -tax
- Financial risk - Business risk - Operational risk - Liquidity risk - Inflation risk - Legal risk
invest pooled investor capital in private real estate
+ access to private real estate + access to specialized knowledge - no direct control - illiquid - performance difficult to measure
are a specific type of private quity real estate funds
+ access to private real estate + access to specialized knowhow - no direct control - illiquid - significant capital requirements
General Partners manage the funds Limited Partners provide the capital
+ limited liability + ability mroe aggressive investment style + access to specialized knowhow + possibility of special cash distribution to partners - returns vary greatly - Illiquidity - requier significant capital
sell shares to stockholders to raise capital and invest this capital in real estate
+ access to real estate investments + enter and exit at will + liquidity + regulated by SEC - right to defer investor share redemption - net asset value may trail true market values - commissions, fees, transaction costs - tax inefficient
are tradable investment securities that track a particular index
+ low costs + tax efficient + liquidity + ability to take short positions + dividend payments
are exchange traded mutual funds with a fixed number of shares outstanding
+ liquidity + can be purchased with margin + long and short positions + transparency + regulated by SEC - tax inefficient - difficult access to specific sectors - discount to NAV
0,75
