Alternative Investments — Free Practice Questions
2 free questions · 7–10% of the Level I exam · answers & explanations
These two questions are a free sample of the same original Alternative Investments questions shipped in the app — exactly what a non-premium user previews. Tap an answer to check yourself and read the LOS-anchored explanation. Alternative Investments carries 7–10% of the CFA® Level I exam; the full app has 75 Alternative Investments practice questions plus the topic’s share of the 540-question mock bank, with cross-audited answer keys.
Compared with traditional investments such as publicly traded stocks and bonds, alternative investments are best characterized as having:
Why: A defining feature of alternative investments is that, relative to traditional publicly traded securities, they tend to be less liquid, subject to lighter regulation, and less transparent in their pricing and holdings. The combinations that pair illiquidity with heavier regulation and more transparency invert the actual pattern: alternatives are generally illiquid AND lightly regulated AND opaque, not a mix of those traits with their opposites.
Which of the following is most likely classified as an alternative investment category rather than a traditional asset class?
Why: Private real estate and infrastructure are standard alternative investment categories alongside private capital, hedge funds, natural resources, and digital assets. Publicly traded investment-grade bonds and listed large-cap equities are traditional asset classes; the structure used to hold them (a separately managed account) does not convert a traditional security into an alternative investment.
Want all 75 Alternative Investments questions + the mock exam?
The full app has 900 practice questions across all 10 CFA® Level I topics, weighted to the published outline, plus a 540-question mock bank — with LOS-anchored explanations and cross-audited answer keys.
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