A Private Equity Fund

question 7

Multiple Choice

A private equity fund:
I.is set up as a limited partnership
II.usually use a 2/20 fee structure
III.place no constraints on manager compensation
IV.typically have a stated life of 7 to 10 years

• A)I and II only
• B)I and III only
• C)I, II and III only
• D)I, II and IV only
• E)I, II, III, and IV

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Definitions:

Equilibrium

A state in a market where demand equals supply, resulting in a stable price for a good or service.

Market Equilibrium

The state where the quantity demanded by consumers equals the quantity supplied by producers, leading to a stable market price.

Economists

Experts focused on analyzing how goods and services are produced, distributed, and consumed.

Opportunity Cost

The loss of potential gain from other alternatives when one particular option is chosen.