CFA Level 2: Alternative Assets – Introduction
Alterative Assets are a major theme in the investing world, so CFAI expects candidates to have general knowledge about assets classes that are beyond the traditional categories of equity/stock and debt/fixed income. The Level 2 exam covers three alternative asset classes: real estate, private equity, and hedge funds.
One item set (six questions) on alternative assets is a reasonable exam expectation. It is unlikely that the entire item set will be dedicated to a single alternative asset, so candidates may see a six question combination covering two or three of the asset classes presented.
While this is a small part of the test, Alternative Assets can also be grounds for easy points. Formulas are short in number and not terribly complex. However, candidates do not want to over invest in Alternative Assets at the expense of more critical subjects. Candidates should have some general understanding of all three alternative asset categories, but avoid getting too slowed down in the details.
This tutorial aligns with Study Session 13 material in the Level 2 CFA Program Curriculum ©.
In this tutorial, we will cover the following material:
I. Real Estate
II. Private Equity
III. Hedge Funds
- CFA Level 2: Alternative Assets – Introduction
- Real Estate: Types of Properties
- Real Estate Valuation: NPV & IRR Analysis
- Income Property Valuation Using Capitalization Rate
- Gross Income Multiplier (GIM) for Real Estate Comps
- Private Equity: Venture Capital, Leveraged Buyouts and Exit Strategies
- Private Equity Fund Structures
- Venture Capital and Leveraged Buyout Valuation
- About Hedge Funds: What You Need to Know