Private Equity and Venture Capital Final Test Quiz Answer (2024)

• The process to be selected is shorter.
• There is no regulation managing PE firms.
• PE can bring some specific industry-related competences to a VBC.

• When the company has to file for bankrupcty
• When a company enters its decline phase or files for bankruptcy
• When the company faces a crisis

• Among others, banks and closed-end funds
• Banks and AMCs
• VCFs and Ccosed-end funds, depending on whether the managers want to leverage or not

• Those who need capital can launch an offer on the internet and see whether they are able to collect the amount needed.
• Investors and management companies accept to get a lower level off profits in terms of capital gains, carried interest and management fees.
• It is a very recent practice.

• Psychological constraints on management
• Wrong industrial management decisions
• New shareholders entrance

• The VCM aims at finding the price of the shares bought by the PE, whereas the DCF aims at finding the equity value.
• The VCM aims at finding the IRR when the price setting is fundamental, whereas the DCF aims at finding the equity value.
• The DCF aims at finding the number of shares bought by the PE, whereas the VCM aims at finding the VBC enterprise value.

• None of the others are true.
• A VCF in the UK is subject to the UK supervisor.
• There is no difference.

• Not every idea can generate a marketable output.
• It only deals with pharmaceutical industries, one of the riskiest industries.
• The managerial role is very high.

• venture capital funds, as well as for closed-end funds.
• funds which invested in seed financing only.
• VC funds only and for closed-end funds which leveraged.

• Depending on the value of the VBC the PEI will choose between the US format or the EU format.
• Depending on the value of the VBC the PE will choose between the hands-on or hands-off approach.
• Depending on the value of the VBC the PEI will choose either to buy existing or newly issued shares.

Question 11)

Why is protection not always granted during a PE deal?

Question 12)

What is the knowledge effect?

Question 13)

According to the European Format, who can invest in PE?

Question 14)

When in the "Managing and Monitoring" phase, the actions taken by the PE to create value have an equal involvement throughout the VBC life cycle:

Question 15)

Use the VCM.

Numbers of shares issues and bought by the PE = 116,783.

Find the Price of the newly issued shares.

(round to the second digit)

Question 16)

What is replacement financing?

Question 17)

Why is it difficult to find a potential buyer for the participation the PE owns?

Question 18)

Which among the following is a requirement for an AMC operating in a closed-end fund environment?

Question 19)

Why is it difficult to find a potential buyer for the participation the PE owns?

Question 20)

Why is protection not always granted during a PE deal?

Question 21)

What are the elements that make up the regulatory framework in the Anglo-Saxon world?

Question 22)

What is the biggest drawback of the DCF?

Question 23)

Why is seed financing very risky?

Question 24)

In the managerial process, the closing activity occurs for…

Question 25)

Suppose there is a fund with the following features:

Find the remunerations for the managers

(round the calculation second digit)

Question 26)

What is meant by board services: one of the actions taken by the PE to create value in the "managing and monitoring?"

Question 27)

Why should a company choose PE over a mortgage or loan?

Question 28)

What two moments form the investing phase?

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