Which of the Following Best Defines the Term Venture Capital

question 202

Multiple Choice

Which of the following best defines the term venture capital?

• A) Underwriter sells as much of the issue as possible, but can return any unsold shares to the issuer without financial responsibility.
• B) Financing for new, often high-risk ventures.
• C) A group of underwriters formed to reduce the risk and help to sell an issue.
• D) Loans made by a group of banks or other institutions.
• E) Direct business loans of, typically, one to five years.

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Definitions:

Bogey Portfolio

A benchmark portfolio against which the performance of an investment portfolio can be measured.

Bonds

Financial instruments representing loans made by an investor to a borrower, typically corporate or governmental, which are expected to be paid back with interest.

Sharpe Measure

An indicator of the performance of an investment compared to a risk-free asset, adjusted for its risk, calculated as the difference in returns divided by the standard deviation of the investment.

Reward

Typically refers to the potential gains or returns derived from an investment or action, balanced against the risk involved.