Of the Following, Who Is Directly Exposed to the Investment

question 27

Multiple Choice

Of the following, who is directly exposed to the investment risk posed by assets?

• A)Superannuation fund managers
• B)Insurance companies
• C)Managers of public unit trusts
• D)Hedge fund managers
• E)None of these.

---

Definitions:

Expected Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, as anticipated by consumers, investors, and economists.

Cost of Capital

The Cost of Capital is the cost of a company's funds (both debt and equity), or, from an investor's point of view, the required rate of return on a portfolio company's existing securities.

Specific Financing

Financing that is intended for a particular purpose or project, with clear specifications and usually backed by specific collateral.

After-Tax Cost

The expense of any financial obligation or investment after accounting for the effects of taxes.