Private Markets Cert Practice Questions - CFA Institute Private Markets & Alternative Investments Certificate Exam

Which of the following best describes the J-curve effect in private equity?

Returns are smooth and linear over a fund's life NAV typically rises immediately after fund inception due to early markups Reported IRRs are negative in early years due to fees and unrealized investments, turning positive as exits occur All distributions occur in the final year of the fund

Correct Answer:

Reported IRRs are negative in early years due to fees and unrealized investments, turning positive as exits occur

Access more questions from this quiz

Continue to Private Markets Cert Practice Questions - CFA Institute Private Markets & Alternative Investments Certificate Exam for more practice questions and the full quiz experience.

Access More Questions