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Reading 37: Alternative Investments Portfolio Management-

 

LOS v: Explain the importance of event risk, market liquidity risk, market risk, and "J factor risk" for distressed securities investors.

Q1. In distressed securities investing, event risk is:

A)   a source of both return and diversification.

B)   a source of diversification only.

C)   a source of return only.

 

Q2. In distressed securities investing, the fact that there can be cyclical supply and demand for these investments is associated with:

A)   arbitrage risk.

B)   J-factor risk.

C)   market liquidity risk.

 

Q3. In distressed securities investing, the type of risk that is from the human element associated with decisions determined in a court of law is called:

A)   event risk.

B)   decision risk.

C)   J-factor risk.

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