CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

A ratchet is a mechanism that determines the allocation of:

A. profits between GPs and LPs of a private equity fund.
B. equity between GPs and LPs of a private equity fund.
C. equity between shareholders and the management team of the private equity controlled company.
Correct Answer: C

It enables the management to increase its equity allocation depending on the company's performance.

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