One problem in creating a private equity index is the: A) | infrequent repricing of the components. |
| B) | problems with defining what constitutes a private equity investment. |
| C) | issue of leverage and how to deal with it. |
| D) | excessive volatility of the components. |
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Answer and Explanation
The value of a private equity index depends upon price-revealing events like IPOs, mergers, the raising of new financing, etc... Thus, the re-pricing of the index occurs infrequently. |