SIE practice questioneasyPrivate Equity
Which statement is true of private equity funds?
- AThey are liquid and can be sold on exchanges
- BThey only invest in government bonds
- CThey are offered to the general public without restrictions
- DThey generally invest in companies not listed on public exchanges✓ Correct answer
Explanation
Why D — They generally invest in companies not listed on public exchanges
A is correct; private equity funds focus on private, nonpublic companies. B is incorrect as their focus is not bonds. C and D are wrong—private equity is illiquid and limited to qualified investors.
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