CFA Practice Question

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CFA Practice Question

Which investment classes are classified as alternative investments?

I. Investments in real estate.
II. 30-year U.S Treasury bonds.
III. Commercial papers.
IV. Gold mines.
V. Stock futures.
Correct Answer: I and IV

User Contributed Comments 9

User Comment
vatsal92 Real estate and fixed assets are part of alternative investments.
jasonkwk stock futures is not alternative investments?
To-be-CFA @jasonkwk: Stock futures are derivatives.
ankurwa10 Stock futures is derivatives and commercial paper and T-bonds would be debt instruments, a long-established traditional asset class.
CJPerugini The reason stock futures are not classified as an alternative investment is because they are an instrument that is used by the alternative investment (hedge fund).
Murtadha Real estate is an investment class with alternative investments and gold mines are a commodity. Other answers represent either debt or in the case of stock futures, as CJPerugini said, is a tool that is used within one of the classes of alternative investments.
ascruggs92 CJPerugini, yes and not. Stock futures are not classified as alternative investments because it has zero of the distinctive characteristics listed in the notes. None of these apply to stock futures:

- lower liquidity
- less regulation
- less transparency
- higher fees
- limited historical return data

They are not classified as AI's because they are transparent, publicly traded instruments in highly liquid (for the most part) markets.
Olesya_CFA You guys are so smart. There is gonna be a tough competition in the investment services market after you all get your designations. Ugh ugh.
ibrahim18 Really smart guys and girls in this room
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