CTFA STUDY EXAM QUESTIONS & ANSWERS 2024

CTFA STUDY EXAM QUESTIONS & ANSWERS 2024 What is a J curve - ANSWER-The return pattern of private equity funds. The cumulative return is negative in the early life of a bond before turning positive. This is because in the early life of a private equity fund there are expenses incurred in the search for attractive investments but there are not any investments to generate returns. True or false? Private equity investing is an excellent source of liquidity. - ANSWER-False. Since private equity is not traded on any market, and investor should be prepared to have no access to their money for an extended period of time example term of 10 to 12 years. How often are hedge fund incentive fees paid? - ANSWER-Annually How often are private equity fund incentive fees paid? - ANSWER-When the investments are actually sold at a profit. What is a closely held corporation? - ANSWER-A corporation for which more than 50% of the value of its outstanding stock is owned by five or fewer individuals. There are generally no public investors in a closely held corporation. What are the primary components of the A-B estate plan? - ANSWER-The marital deduction. Credit shelter trust. What are the two trust commonly used under the A - B estate plan called? - ANSWER-The credit shelter trust. The marital deduction trust. Why are the assets in a marital deduction trust tax deferred? - ANSWER-Because the assets utilize the unlimited marital deduction.