CFA Practice Question

CFA Practice Question

Venture capitalists expect to actually realize their returns ______
A. spread out evenly over the length of the investment.
B. only if the company becomes profitable on a consistent basis.
C. only when they are able to cash out.
Explanation: The objective of the venture capitalist is to earn a 40% - 70% annual return on an investment, net of inflation. Venture capitalists expect to actually realize their returns only when they are able to cash out, which is hopefully in less than ten years (and preferably in three to seven).

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