CFA Level I · CFA Level I Exam · Alternative Investment Features, Methods, and Structures
An investor holds units in a vehicle that owns toll roads and airports and earns long-term, inflation-linked cash flows. This investment is best described as belonging to which alternative investment category?
The investment is best described as infrastructure. Toll roads and airports are long-lived real assets that provide essential services and often generate stable, inflation-linked cash flows, which distinguishes them from private equity stakes in companies or from commodity exposure.
- APrivate equity
- BInfrastructureCorrect
- CCommodities
Explanation
Toll roads and airports are real assets providing essential services, which are infrastructure investments within the real assets group. Private equity involves ownership of operating companies' equity, and commodities are raw materials rather than operating facilities.
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