22.6.1 Listed Private Equity

## What is a listed private equity company? - [ ] A company that exclusively invests in publicly traded stocks - [ ] A hedge fund with publicly traded shares - [x] An investment company that uses its capital to purchase or invest in other companies, with shares traded on a stock exchange - [ ] A mutual fund focusing on private corporations > **Explanation:** A listed private equity company is an investment firm whose shares are publicly traded on a stock exchange, using its capital to invest in both publicly traded and privately held companies. ## What kinds of investment holdings can a listed private equity company have? - [ ] Only companies that are publicly traded on a stock exchange - [ ] Only privately held companies - [x] Companies that are both publicly traded and privately held - [ ] Only real estate investments > **Explanation:** Listed private equity companies can invest in both publicly traded companies and privately held companies, providing a diverse range of investment opportunities. ## Why have more private equity companies started listing on stock exchanges over the past decade? - [x] Better access to capital, improved liquidity, and transparency - [ ] Reduced regulatory requirements - [ ] Less competition - [ ] Higher transaction fees > **Explanation:** The shift towards listing on stock exchanges provides private equity companies with better access to capital, improved liquidity, and greater transparency, among other benefits. ## Where does ABC Corp. trade? - [ ] New York Stock Exchange - [ ] Nasdaq - [ ] London Stock Exchange - [x] Toronto Stock Exchange > **Explanation:** ABC Corp. is a private equity firm that trades on the Toronto Stock Exchange. ## What sectors does ABC Corp.'s holdings include? - [ ] Technology, retail, and manufacturing - [ ] Energy, utilities, and telecommunications - [x] Real estate, financial, and health care - [ ] Agriculture, transportation, and logistics > **Explanation:** ABC Corp.'s holdings are diversified across the real estate, financial, and health care sectors. ## What is one reason for the allure of investing in a listed private equity company for a retail investor? - [ ] Guaranteed returns - [ ] Lower risk compared to bonds - [x] Access to diversified investment holdings not typically available to retail investors - [ ] Tax advantages > **Explanation:** Investing in a listed private equity company allows retail investors to access a diversified range of investment holdings that would normally not be available to them. ## Traditionally, how were private equity companies structured? - [ ] As public companies listed on stock exchanges - [ ] As mutual funds - [x] As privately held companies using their own invested capital - [ ] As government entities > **Explanation:** Historically, private equity companies were privately held and used their own invested capital to make investments. ## How do investors buy shares in a listed private equity company? - [ ] Through direct investment in the companies they hold - [ ] By investing in mutual funds that hold private equity shares - [x] By purchasing shares on a stock exchange like any publicly traded company - [ ] Through private sales > **Explanation:** Investors can buy and sell shares of a listed private equity company on a stock exchange just like they would with any other publicly traded company's shares. ## Who predominantly manages ABC Corp.'s investments and assets? - [ ] A board of directors - [ ] A single CEO - [ ] A team of private consultants - [x] A team of 30 partners > **Explanation:** ABC Corp. is managed by a team of 30 partners who oversee corporate investments, private equity portfolios, and other assets. ## What is the primary goal of ABC Corp.'s investment capital? - [ ] To earn short-term profits - [ ] To enhance employee benefits - [x] To purchase companies with long-term capital gains potential - [ ] To invest in startups only > **Explanation:** ABC Corp. uses its investment capital to purchase companies that appear to offer potential for long-term capital gains.