What are the factors in determining the expected rate of return of LPs? Group of answer choices a. The high failure rate of early-stage investment. b. Liquidity risk c. The possibility that GPs squander
What are the factors in determining the expected rate of return of LPs? Group of answer choices a. The high failure rate of early-stage investment. b. Liquidity risk c. The possibility that GPs squander
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What are the factors in determining the expected rate of return of LPs?
Group of answer choices
a. The high failure rate of early-stage investment.
b. Liquidity risk
c. The possibility that GPs squander
Expert Solution
Limited partners (LPs):
Limited partners (LPs) are investors in a limited partnership, such as a venture capital (VC) fund or private equity (PE) fund. In a limited partnership, there are two types of partners: general partners (GPs) and limited partners (LPs). GPs are responsible for managing the partnership and making investment decisions, while LPs are passive investors who provide the capital for the partnership.
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