CFA Level I · CFA Level I Exam · Alternative Investment Features, Methods, and Structures
Compared with traditional investments, alternative investments are most likely to exhibit which of the following characteristics?
Alternative investments most likely show greater illiquidity and more complex structures. They usually carry higher fees, infrequent appraisal-based valuation and less standardized regulation than traditional stocks and bonds, which trade daily with low costs and transparent prices.
- ALower fees and daily pricing
- BGreater illiquidity and more complex structuresCorrect
- CHighly standardized regulation across all vehicles
Explanation
Alternatives typically have higher fees, less liquidity, less transparent valuation, specialized managers and more complex structures. The other options describe traditional investments or are inaccurate.
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