Alternative Investments potential, ask, important, anything, crucial

towardsutopia21

I am just now noticing that I really haven't spent any time on Alternative Investments since maybe... December?

All of my QBank scores have been ok, but I don't want to miss anything important.

I'm going to give it a re-read if I can, but let me ask: What are the top 3 most crucial things (in terms of potential exam marks) from the AI section?

joemoran

ETF - in-kind redemption, risks, benefits
NOI - calculating NOI
Commodity - hedging a long futures position, how to calculate return on it.

kamara5

I've seen some questions asking about commodities contango and backwardation (I used '08 notes and I'm not sure if it relates to Derivatives or Alt Investments) and whether or not each has a positive or negative roll yield.
- Know the 4 different methods valuating real estate
- The 3 methods to valuate a closely held biz
- You could look at the different stages of venture capital
- What is Mezzanine financing?
- How to calculate NAV
- Differences between an open and closed fund
- Hedge funds, benefits/risks, what are some biases towards HF reporting?

shootingstar

Real estate valuation has been coming up on most of my Qbank sessions.

jim8z3

There is an Alternative Investments section?

JK, I need work here too since I've neglected it. I think Chuckrox8 list sounds like main topics they'd form questions from.

Finalnub

contango and backwardation

sgupta0827

negative roll yield in contango (future price>spot rate), which is usually the case.

so implication is that if roll yield is positive then futures market must be in backwardation (future price<spot price).

I have no idea what roll yield is : P

marsilni

Hilarious that nobody knows what roll yield is but we all know that if it's negative, it's in backwardation and if it's positive it's in contango. Count me in that group as well.

LokiDog2

Key points to know for AI:

- Know ETFs (advantages/disadvantages)
- Know the 3 approaches to valuing real estate and how to calculate the value of the property under all 3 approaches (cost, sales comparison and income methods)
- Know risks of hedge funds and different types of hedge funds
- NOI NOI NOI NOI NOI and....N......wait for it....OI (people who watch How I Met Your Mother should get that one)
- Collateralized commodities futures position material
- Aspects of open-end and closed-end funds
- Wouldn't hurt to look up 12 b-1 fees

Micholien

Roll Yield is basically just an increase/decrease in price that occurs when a particular security is "rolled" into a new futures contract (instead of trading in the futures contract or letting it expire).

Contango = Negative roll yield (bad)
backwardation = Positive roll yield (good)

The aim is to achieve the highest roll yield possible.