Private Equity Intermediate - Capital 2018

Question 1

A class of ownership in a corp that has a higher claim on the assets/earnings than common stock

Accepted Answer

Preferred Stock

Question 2

The following investors are included in the FIHI calculations for purposes of FS disclosure

Accepted Answer

Limited Partners

Question 3

Which of the following is not a main financial highlight disclosed in a PE financial statement?

Accepted Answer

Total Return

Question 4

The governing document typically used in marketing and highlighting fund provisions and info

Accepted Answer

Private Placement Memorandum

Question 5

When managers voluntarily reduce the size of funds via reduction of outstanding commitments

Accepted Answer

Commitment Waiver

Question 6

This provision gives the LP's the right to reclaim a portion of the GP's carried interest

Accepted Answer

Clawback

Question 7

Cash invested for a private equity fund is typically done:

Accepted Answer

Over time

Question 8

This distribution methodology calculates carried interest on a deal by deal basis.

Accepted Answer

European Style

Question 9

An example of this strategy: A company going public (IPO) and selling shares on the open market

Accepted Answer

Exit Strategy

Question 10

Withdrawal/redemption rights for a private equity fund are typically given:

Accepted Answer

Never (only upon transfer of interest)

Question 11

Risk that mgmt. prepared FS are materially misstated & auditor won't detect such misstatement

Accepted Answer

Audit Risk

Question 12

After pref. return is reached, the GP receives these profits before carried interest

Accepted Answer

GP Catch-Up

Question 13

Which of the following is not a general step in the waterfall calculation?

Accepted Answer

Management fees

Question 14

Investment strategy involving holding a portfolio of invest funds rather than direct investment

Accepted Answer

Fund of Funds

Question 15

An investment strategy whereby companies are acquired using a significant amount of borrowed $

Accepted Answer

Leveraged Buy-Out

Question 16

Management fees for a private equity fund are typically based on:

Accepted Answer

Commitment or invested basis

Question 17

The periodic payment by partners to the investment adviser for services related to the fund

Accepted Answer

Management Fee

Question 18

A minimum return that the LPs are entitled to before the GP receives carried interest

Accepted Answer

Preferred Return

Question 19

Audit procedure required to be performed regardless of the size of the entity being audited

Accepted Answer

Journal Entry Testing

Question 20

This firm structures the Private Equity LP & is responsible for managing the fund being raised

Accepted Answer

Management Company

Questions 20