2018 - Intermediate PE Training - Planning & Operating Agreements

Question 1

The risk that assumes that absent controls, there is susceptibility of material misstatement.

Accepted Answer

Inherent Risk

Question 2

LP-friendly waterfall allocation methodology that calcs carried interest based on total capital

Accepted Answer

European style

Question 3

Which type of transaction is generally a characteristic of a private equity fund.

Accepted Answer

High dollar, low volume

Question 4

The acquisition of another company using a borrowed money to meet the cost of acquisition

Accepted Answer

Leveraged buy-out

Question 5

Committee that advises the GP on issues including conflicts of interest and changes to the LPA

Accepted Answer

Limited Parter Advisory Committee (LPAC)

Question 6

This document is used in marketing and highlighting fund provisions and other information.

Accepted Answer

Private Placement Memorandum

Question 7

Association created to encourage communication between GPs / LPs and to improve the PE industry

Accepted Answer

Institutional Limited Partners Association

Question 8

Fees paid by a portfolio company to a member of the fund for sitting on the company's board.

Accepted Answer

Directors' Fees

Question 9

The basis for management fees in the beginning of the life of a PE fund is typically:

Accepted Answer

Commitments

Question 10

PAY ATTENTION! THE WORD "BLUE" IS THE RIGHT ANSWER.

Accepted Answer

BLUE

Question 11

This detail is included on a capital confirm of a private equity fund but never on a hedge fund

Accepted Answer

Capital Commitment

Question 12

An agreement that is supplementary to another agreement (usually the LPA with respect to PE)

Accepted Answer

Side agreement

Question 13

A fund investing in early-stage, high-potential, high risk, growth startup companies.

Accepted Answer

Venture Capital Fund

Question 14

What are the three "ILPA" private equity principles?

Accepted Answer

Alignment of interest, governance, transparency

Question 15

This is the legal governing document to be used when filling out a fund abstract.

Accepted Answer

Limited Partnership Agreement

Question 16

The periodic payment by the LPs to the investment advisor for services related to the fund.

Accepted Answer

Management Fees

Question 17

AU 316 mandates this procedure be performed by the auditor regardless of the size of the entity

Accepted Answer

Journal Entry Testing

Question 18

These two accounts should not be annualized when performing analytics during an interim period.

Accepted Answer

Realized Gains/Losses and Change in Unrealized Gains/Losses

Question 19

Generally, the only way a partner can leave a private equity fund.

Accepted Answer

Transfer of Interest

Question 20

The maximum amount of contributions each partner can be expected to make to a PE fund.

Accepted Answer

Capital commitment

Questions 20