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Private Equity

Exam 1: 2019/20 T3

Comprehensive exam-prep quiz on PE fund structure, PE return measures, LBO candidates, mezzanine financing, return decomposition, debt coverage, IRR, sweet equity, and sources-and-uses. Source:

Question 1 of 22

What is the most that an investor in a private equity fund can lose?

Pick one: press 1-4 on your keyboard or click an option.
A

Half of their total capital contributions

B

The sum of their capital contributions only

C

Nothing, because the general partner absorbs all losses

D

Their total capital contributions plus any liability the fund may incur