Private equity returns are difficult to estimate due to the fact:

A) that there is no direct or required form of disclosure of returns
B) both $ A $ and $ C $
C) that private equity is not as frequently traded
D) none of the above

Question

Private equity returns are difficult to estimate due to the fact:

A) that there is no direct or required form of disclosure of returns
B) both $ A $ and $ C $
C) that private equity is not as frequently traded
D) none of the above

Quizplus · Accepted Answer

Private equity returns are difficult to estimate for two reasons.First,private equity is by definition private,and there is no direct or required form of disclosure of returns.Second,private equity is not actively traded,and hence there are relatively few observable transactions (even if they are reported)on which to formulate a return series.Nonetheless,indirect evidence can be obtained through tax records,government statistics and reported transactions,but it is inevitably subject to a degree of imprecision.

Private Equity Returns Are Difficult to Estimate Due to the Fact