CFA CFA Level 1 CFA Level 1 Question of the Week – Portfolio Management

CFA Level 1 Question of the Week – Portfolio Management

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    • Matt_AnalystPrep
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      Which of the following is least likely a similarity between buyout funds and venture capital funds?

      • A. They both seek to only acquire a minority stake in the firms they invest
        in.
      • B. They both make investments with finite investment horizon (usually 3 to
        5 years).
      • C. They both often take control of the board of the companies in which they
        invest.
    • Matt_AnalystPrep
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      The correct answer is A.

      Similar to buyout funds, venture capital funds typically have finite investment horizons (usually 3 to 5 years). Also, they both take control of the board of the companies in which they invest.
      However, buyout funds almost always buy 100% of a company, whereas venture capital firms only acquire a minority stake – less than 50%. Therefore, option A is the least likely answer.

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