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
Private equity funds generally invest in companies that are not publicly listed. They are typically illiquid and restricted to qualified or accredited investors rather than sold freely to the general public.
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