Chartered Investment Manager (CIM) Practice Exam · Question
Which of the following is a characteristic typically associated with alternative investments?
Alternative investments often exhibit low correlation with traditional assets like stocks and bonds, which can provide diversification benefits to a portfolio.
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Question: Which of the following is a characteristic typically associated with alternative investments?
Answer options:
- High liquidity and transparency. ✅ Low correlation with traditional asset classes.
- Daily valuation and high regulatory oversight.
- Standardized investment structures and easy access for retail investors.
Correct answer: Low correlation with traditional asset classes.
Explanation: Alternative investments often exhibit low correlation with traditional assets like stocks and bonds, which can provide diversification benefits to a portfolio. They also typically have lower liquidity, less transparency, and unique structures.
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