What This Document Is
This document is a midterm guide focused on alternative investments, prepared for students in FIN 672 (Investment Analysis/Portfolio Management) at American University. It serves as a review resource covering key concepts and terminology related to investments beyond traditional stocks and bonds. The notes are dated January 25, 2018, and cover material from January 18, 2018.
Why This Document Matters
This guide is essential for students preparing for a midterm exam on alternative investments. It’s designed to help consolidate understanding of a complex area of finance, particularly for those building a career in portfolio management or investment analysis. It’s most useful when used *in conjunction with* course lectures, readings, and assignments.
Common Limitations or Challenges
This guide is a condensed overview and does not replace the need for a thorough understanding of the course material. It provides a framework for review but doesn’t offer in-depth explanations or practice problems. It also represents a snapshot in time (January 2018) and may not reflect the most current developments in the field.
What This Document Provides
The guide includes an overview of different types of alternative investments, including real assets, hedge funds, venture capital, private equity, and structured products. It outlines the key characteristics that differentiate alternative investments from traditional assets – regulatory considerations, liquidity, compensation structures, and the role of institutional investors. It also covers concepts like alpha and beta in the context of alternative investments, performance measurement using IRR and NPV, and the importance of understanding cash flow waterfalls and clawbacks. Finally, it touches on statistical measures used to analyze alternative investment performance, such as covariance, correlation, and normality tests.
This preview *does not* include detailed explanations of specific investment strategies, case studies, or practice exam questions. It also does not cover all potential topics on the midterm.