- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 4. Overview of Equity Securities
- Subject 3. Private versus Public Equity Securities
CFA Practice Question
Which statements are true?
II. Public equity securities are more liquid than private equity securities.
III. Private equity funds are more likely to challenge the way businesses are run and improve the operations of these businesses.
I. Public equity markets are much larger than private equity markets.
II. Public equity securities are more liquid than private equity securities.
III. Private equity funds are more likely to challenge the way businesses are run and improve the operations of these businesses.
Correct Answer: I, II and III
User Contributed Comments 1
| User | Comment |
|---|---|
| ascruggs92 | I is a bit too vague. If by "market" are referring to actual exchanges like the NYSE, then it is true. If by "Public Equity" and "Private Equity" they are referring to firms dedicated to buying and selling public equity vs. private equity, then sure, that is right. However, I inferred "market" as the number and value of assets and available for exchange, in which case, the private market it multiple times bigger than the public equity market. It is not as liquid, obviously, but that doesn't mean it's not there. |