Which of the following is true about infrastructure investments as an alternative asset class?

Question: Which of the following is true about infrastructure investments as an alternative asset class?

Answer options:

• They typically offer high liquidity and short investment horizons. ✅ They often provide stable, inflation-linked cash flows and diversification benefits.
• They are generally uncorrelated with interest rate movements.
• They are easily valued due to their transparent public market pricing.

Correct answer: They often provide stable, inflation-linked cash flows and diversification benefits.

Explanation: Infrastructure investments (e.g., roads, bridges, utilities) often generate stable, long-term cash flows that can be inflation-linked through tolls or regulated tariffs. Their long-term nature and unique risk-return profile can offer diversification benefits to a traditional portfolio.