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Question 1

Sorry, that's incorrect.
The Correct Answer is Asset-based approach.
A company owned by a private equity fund is valued using only balance sheet information. This valuation methodology is best described as a(n):

Question 2

Sorry, that's incorrect.
The Correct Answer is Leveraged loans often make up the largest portion of the capital structure.
Which of the following statements about leveraged buyout (LBO) financing by a private equity firm is most accurate?

Question 3

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The Correct Answer is Strong cash flow.
An attractive leveraged buyout target most likely exhibits:

Question 4

Sorry, that's incorrect.
The Correct Answer is Clawback provision.
Which of the following features most likely applies to the fee structure of a private equity fund?

Question 5

Sorry, that's incorrect.
The Correct Answer is Senior debt.

Bank loans used in private equity financing are most likely:

Question 6

Sorry, that's incorrect.
The Correct Answer is Committed capital during the draw-down phase and invested capital afterwards.

Which of the following statements about private equity funds is most accurate? Management fees are based on:

Question 7

Sorry, that's incorrect.
The Correct Answer is Planning to expand or restructure.

Development capital most likely refers to minority investments in companies:

Question 8

Sorry, that's incorrect.
The Correct Answer is Clawback provision.

A private equity fund charges incentive fees based on profits earned over time. If limited partners have not received back their initial investment, the refund of excess incentive fee payments is most likely enforced by a:

Question 9

Sorry, that's incorrect.
The Correct Answer is Leveraged loans.

Which of the following financing sources for a private equity firm is most likely considered senior secured debt?

Question 10

Sorry, that's incorrect.
The Correct Answer is Core, infinite-life, open-end funds.

Most real estate private equity funds are structured as: