Chartered Alternative Investment Analyst (CAIA) Certification Exam Bundle

Define investment - Answer Investment is deferred consumption List the four major types of real assets other than land and other types of real estate. - Answer Natural resources, commodities, infrastructure, and intellectual property. List the three major types of alternative investments o...

CAGR - Answer compound annual growth rate annualized return - Answer (1+HPR)^number of holding periods in one year - 1 multiple hedge fund aggregation - Answer equal weighted approach, asset weighted, and arbitrary weight approach Performance index - Answer R index = Sum of wi * Ri ...

Absolute Returns - Answer An absolute return standard means that returns are evaluated relative to the riskless rate, or zero, and therefore independently of performance in equity markets, debt markets, or any other markets. Jarque-Bera test - Answer involves a statistic that is a function of...

5th percentile vs 25th percentile performance - Answer 5th percentile managers outperform in every comparison BUT 25th percentile managers' performance is more volatile --> even if 25th percentile managers outperform they tend to mean revert --> demonstrates the perils of choosing managers ...

Chapter 1 What is an Alternative Investment? 1. Define investment - Answer • Investment is deferred consumption 2. List four major types of real assets other than (5) land (6) other types of real estate - Answer • Natural resources • commodities • infrastructure • intellectua...

4 types of alternative assets - Answer Alternatives are defined by inclusion: Real Assets Hedge Funds Private Equity Structred products Real Assets - Answer Direct ownership of non financial assets: - natural resources - commodities - real estate - land - infrastructure - IP (intell...

absolute return products - Answer Absolute return products are investment products viewed as having little or no return correlation with traditional assets, and have investment performance that is often analyzed on an absolute basis rather than relative to the performance of traditional investme...

Regulatory Structures - Answer include government regulation and taxation. Securities structures - Answer include methods of cash flow securitization and the resulting trade-able units. Trading Structures - Answer Include the development and execution of trading strategies utilized by in...

'40 Act Funds (Mutual Funds) - Answer Registered investment pools offering their shareholders pro rata claims on the fund's portfolio of assets. Back Office Operations - Answer Play a supportive role in the maintenance of accounts and information systems used to transmit important market an...

Compounding - Answer - is the recognition of interest on interest or, more generally, earnings on earnings Simple Interest - Answer - a quick and easy method of calculating the interest charge on a loan and does not incorporate compounding Continuous Compounding - Answer - mathematical l...

6 types of private equity - Answer Equity PE - venture capital - buyouts - merchant banking Debt PE - mezzanine debt (debt / equity hybrid for middle market companies) - distressed debt - leveraged loans (noninvestment grade LIBOR + 1.25% Criteria for distressed debt - Answer Equal to ...

Methods of Analyzing Alts - Answer 1)Return Computation Methods 2) Statistical Methods 3)Valuation Methods 5)Portfolio Management Methods How does Return Computation Method analysis for alts differ from traditional return computation analysis? - Answer Page 76 How do portfolio manage...

Define continuous compounding - Answer Continuous compouding assumes that earnings can be instantaneously reinvested to generate additional earnings Define discrete compounding - Answer Discrete compounding inludes any compounding interval other than continuous compounding such as daily, mont...

Primary economic role of structuring - Answer Structured securities complete the market - structured to meet all different needs & helps investors prepare for all states of the world MBS - Answer Mortgage-backed securities - security secured by pool of mortgages (mortgages are the collateral)...