- CFA Exams
- CFA Level I Exam
- Topic 8. Alternative Investments
- Learning Module 2. Alternative Investment Performance and Returns
- Subject 1. Issues in Performance Appraisal
CFA Practice Question
Some hedge funds have two NAVs. Which NAV incorporates liquidity discounts?
B. net NAV.
C. trading NAV.
A. reporting NAV.
B. net NAV.
C. trading NAV.
Correct Answer: C
The reporting NAV is based on quoted market prices and does not incorporates liquidity discounts.
User Contributed Comments 2
| User | Comment |
|---|---|
| Inaganti6 | How do they arrive at a consensus of what the liquidity discount should be ? |
| khalifa92 | bid:ask spread ? |