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You meet the following 4 investors and each have their own beliefs:

7. You meet the following 4 investors and each have their own beliefs:

Pete thinks that both company ABC and XYZ will perform equally well.
Mary thinks that company XYZ will perform badly but has neutral views on the performance of company ABC.
Roger thinks that company XYZ will perform badly while company ABC will perform very well.
Lucy thinks that company ABC will perform well but has neutral views on the performance of company XYZ.
Given their views, which of the following sets of strategies are the one they are most likely to pursue?

 

  • Pete will have two long positions of equal size in the stocks of ABC and XYZ.
    Mary will have a short position in the stock of XYZ.
    Roger will have a short position in the stock of ABC and a long position in the stock of XYZ.
    Lucy will have a long position in the stock of ABC.
  • Pete will have two long positions of equal size in the stocks of ABC and XYZ.
    Mary will have a short position in the stock of ABC.
    Roger will have a short position in the stock of XYZ and a long position in the stock of ABC.
    Lucy will have a long position in the stock of XYZ.
  • Roger will have two long positions of equal size in the stocks of ABC and XYZ.
    Mary will have a short position in the stock of XYZ.
    Pete will have a short position in the stock of XYZ and a long position in the stock of ABC.
    Lucy will have a long position in the stock of ABC.
  • Pete will have two long positions of equal size in the stocks of ABC and XYZ.
    Mary will have a short position in the stock of XYZ.
    Roger will have a short position in the stock of XYZ and a long position in the stock of ABC.
    Lucy will have a long position in the stock of ABC.

 

  • Pete will have a short position in the stock of XYZ.
    Mary will have two long positions of equal size in the stocks of ABC and XYZ.
    Roger will have a long position in the stock of ABC.
    Lucy will have a short position in the stock of XYZ and a long position in the stock of ABC.8. Which of the following statements about Private Markets are true?

 

  • An advantage that private investments have over public investments is their lack of liquidity.
  • “Unicorns” are private companies that have reached a valuation in excess of $1 billion.
  • Private companies tend to be at an earlier stage of development and hence it is relatively easy to pick exceptionally successful companies among these.
  • Professional private equity investor tend to take an active role in running the companies in which they hold equity.
  • Private companies tend to be smaller companies that cannot access financial markets.
  • Public companies are traded on stock exchanges and are not required to disclose financial accounts and earnings.