What Is a Major Reason That Entities Invest in Private

question 28

Multiple Choice

What is a major reason that entities invest in private equity funds?

• A)Higher returns than can be earned from the stock market
• B)The joy of seeing new companies start up
• C)The safety of the investment
• D)None of the above

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Definitions:

Bubbles

Economic phenomena characterized by rapid increases in asset prices to levels significantly above their fundamental values, followed by abrupt crashes.

Demand

The desire combined with the ability to purchase a specific quantity of a good or service at a particular price and time.

Supply

The total amount of a product or service available for purchase at any given price point in a market.

Purchasing Power Parity

A theory in economics that suggests that in the absence of transaction costs and other barriers, identical goods should have the same price in different countries when prices are expressed in a common currency.