CFA Level I · CFA Level I Exam · Alternative Investment Features, Methods, and Structures
Which of the following is most likely a feature that distinguishes a direct investment in infrastructure from an investment in publicly traded equities?
Long-lived assets generating often inflation-linked cash flows most likely distinguish direct infrastructure investment. Toll roads and utilities have contracted or regulated revenues, while daily mark-to-market valuation and exchange-volume pricing are features of publicly traded equities rather than private infrastructure holdings.
- ADaily mark-to-market valuation
- BLong-lived assets generating often inflation-linked cash flowsCorrect
- CPricing based entirely on exchange trading volume
Explanation
Infrastructure assets such as toll roads and utilities are long-lived and often have contracted or regulated, inflation-linked cash flows. Daily pricing and exchange-driven pricing describe public equities.
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