An IRR Preference Will Always Give the Investor a Return

question 12

True/False

An IRR preference will always give the investor a return that is equal to or better than what the return would be with an IRR lookback.

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Definitions:

Loss

Loss refers to the reduction in value of an asset, or a decrease in financial wealth due to expenses exceeding revenues.

Transferred

The act of moving or conveying something from one place, person, or entity to another.

Ordinary Holder

A term used in finance to describe a person in possession of a negotiable instrument, like a check or bond, who has certain rights to it.

HDC (Holder in Due Course)

A party that has acquired a negotiable instrument in good faith and for value, therefore enjoying certain legal protections.