CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

Which statement(s) is (are) true for a venture capital firm?

I. It usually has a specialized industry focus (e.g., technology).
II. It focuses more on EBIT growth rather than revenue growth.
III. It typically conducts full blown due diligence approach before investing in the target firm (financial, strategic, commercial, legal, tax, environmental).
Correct Answer: I

II: It usually seeks revenue growth.

III. Venture capital firm tends to conduct primarily a technology and commercial due diligence. Financial diligence is limited as portfolio companies have no or little operating history.

User Contributed Comments 1

User Comment
rhardin Yes, the companies may have no or little operating history, but you still perform due diligance on the history that is there. I don't know if I agree with III being wrong... If I am investing in a venture capital firm, they better be performing due diligence on all available info, including financial info!
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