Practice Test GeeksCSC - Canadian Securities Course Practice Test
← All CSC Flashcard Decks

Alternative Investments Flashcards

6 cards from real CSC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Alternative Investments flashcards as text

  1. Which of the following best describes 'infrastructure' as an alternative asset class?

    Answer: Long-lived physical assets like toll roads, airports, and pipelines that generate stable cash flows

    Infrastructure assets are long-lived, capital-intensive facilities that typically operate under regulatory frameworks and generate predictable, inflation-linked revenue streams.

  2. What is 'venture capital' primarily used for?

    Answer: Financing early-stage or growth-stage companies with high return potential

    Venture capital provides equity financing to startups and early-stage companies, accepting high risk in exchange for the potential of significant returns if the company succeeds.

  3. The Sharpe ratio is used to evaluate alternative investments by measuring:

    Answer: Excess return earned per unit of total risk (standard deviation)

    The Sharpe ratio divides excess return (above the risk-free rate) by the investment's standard deviation, indicating how much return is generated per unit of risk.

  4. A 'lock-up period' in a hedge fund context refers to:

    Answer: A minimum holding period during which investors cannot redeem their capital

    Lock-up periods, typically 1–2 years, allow hedge fund managers to invest in illiquid strategies without being forced to sell assets to meet redemption requests.

  5. Which regulatory exemption do most Canadian hedge funds rely on to distribute to investors without a full prospectus?

    Answer: The accredited investor exemption under National Instrument 45-106

    Hedge funds typically use the accredited investor exemption under NI 45-106, allowing distribution to high-net-worth individuals and institutions without a prospectus.

  6. Managed futures funds primarily use which instruments to implement their investment strategies?

    Answer: Exchange-traded futures and forward contracts across multiple asset classes

    Managed futures, run by Commodity Trading Advisors (CTAs), trade liquid futures and forward contracts on commodities, currencies, equities, and interest rates, often using trend-following models.