CFA Mock Review

An investment with an initial cost of $30,000 is sold for $60,000 after two years. The annual return on a continuously compounded basis is closest to:

(60,000/30,000)^.5(2 periods) equals 1.4142 Then take the log 34.65%

Repo Haircut

(Security Price-Purchase Price)/Security price

The initial market value of a portfolio was $100,000. One year later the portfolio was valued at $90,000 and two years later at $99,000. The geometric mean annual return excluding any dividend income is closest to:

-.5% Loses 10% in year 1 Gains 10% in year 2 Geometric mean {sqrrt (.9)(1.1)}-1 or (End/beg)-1

Attractiveness of the local business climate

A Canadian city issues a CAD 100 million general obligation bond. Which of the following credit measures is most relevant in analyzing the risk of this bond? General obligation bonds are unsecured bonds issued by non-sovereign governments that are backed by the general revenues of the issuer, rather than by specific collateral or a specific revenue stream. Key credit measures in analyzing general obligation bonds include the attractiveness of the local business climate, the government's ability to levy and collect taxes, the stability of the tax base, and economic diversification. The other choices are more relevant for revenue bonds

swap rates

A bond with nine years to maturity is quoted at an interpolated spread of +150 basis points. The benchmark yield for this bond is: Interpolated spreads (I-spreads) are spreads to swap rates.

C

A central bank's ability to achieve its policy goals is most likely to be limited by available resources when which of the following actual rates is below its target rate? A) Interest rate. B) Inflation rate. C) Exchange rate. With exchange rate targeting, a central bank's ability to increase the value of the domestic currency is limited by the amount of foreign reserves the country has available to buy its own currency in the foreign exchange market. While inflation targeting and interest rate targeting have limitations (e.g., liquidity trap conditions may exist, interest rates are bounded by zero), the central bank's resources are not typically a limitation.

Decreases in price for financial assets

A change from a neutral monetary policy to a contractionary monetary policy is most likely to be reflected in the economy by: A) decreases in price for financial assets. B) decreased lending rates in the banking system. C) depreciation of the domestic currency in the foreign exchange market. Contractionary monetary policy typically results in increased interest rates, which decrease the prices of financial assets by decreasing the present value of future cash flows. Increasing interest rates typically cause the domestic currency to appreciate.

Low current ratio means low liquidity

A company is most likely to be viewed as having poor liquidity, compared to its industry, if it has a: A) low current ratio. B) low days of payables. C) high debt-to-equity ratio. The current ratio, CA/CL, is a primary measure of liquidity. The debt-to-equity ratio is primarily a measure of a company's solvency and financial risk, not liquidity. Low days of payables indicate the company pays it suppliers sooner than other firms, not necessarily that is has poor liquidity.

A

A company's investments in marketable securities include a 3-year tax-exempt bond measured at amortized cost and a 5-year government note measured at fair value through other comprehensive income. On its income statement, the company should report the coupon interest received from: A) both of these securities. B) neither of these securities. C) only one of these securities. Interest and dividends received are reported as income, regardless of the balance sheet classification of marketable securities.

Higher prices for imported goods

A country has implemented tariffs and import quotas. These policies are most likely to result in: Both policies are likely to decrease consumer surplus, increase the prices of imported goods, and increase the domestic quantity supplied

The project is financed with capital that has a three year life

A going concern project has an expected time frame for completion of three years and a cost of $35 million. To implement a match funding approach, the company should ensure that:

.6 hard 1.5 soft

A hedge fund has a hurdle rate of 6% and generates a positive return of 10% for the year. The performance fee is 15% of gains. The performance fee will equal:

The firm uses the installment sales method for financial reported

A permanent difference between pretax and taxable income is least likely to arise when a firm: things that would cause permanent timing differences When the firm receives tax exempt interest Pays premiums on life insurance of key employees

Cluster Sampling

A researcher has data on the 20 largest firms in each state and samples the data by choosing 20 states at random and then selecting 10 firms at random from each of the samples. Her sampling method is referred to as: The procedure described is an example of two-stage cluster sampling. With stratified random sampling, all subsets of the data (all states) would be included, and random samples would be selected from each. Convenience sampling is based on the low cost or easy availability of the data used.

Low transaction costs

A securities market has operational efficiency if it exhibits others Informational Efficiency- reflect new information without bia Rates of return- proportional to risk on average

A

According to the Code and Standards, members and candidates who are involved in distributing an initial public offering (IPO) of equity shares and wish to participate in the IPO: A) may participate unless the IPO is oversubscribed. B) may not participate because this creates a conflict of interest. C) must obtain pre-clearance from a supervisor before participating.

B

According to the Standard related to loyalty, prudence, and care, which of the following statements regarding the voting of proxies on client holdings is least accurate? A) Proxies have economic value to a client. (true) B) An investment management firm should vote all proxies on client holdings unless the client reserves that right. (False- not all) C) Members and candidates should explicitly disclose the firm's proxy voting policies to clients. (True)

C- does not necessarily need to be updated quarterly (at least annually only more frequently if there are significant changes to strategy or client characteristics)

According to the recommended procedures for complying with the Standard on suitability, which of the following statements regarding an investment policy statement (IPS) is least accurate? A) An IPS should describe the roles and responsibilities of both the adviser and the client. B) A member or candidate is not responsible for financial information withheld by the client. C) A client's IPS must be updated at least quarterly to reflect any changes in their investment

Decrease with greater debt in capital structure because it makes management less likely to do something dumb because of the debt covenants that they own

Agency costs of equity: A) are unaffected by capital structure. B) increase with greater debt in the capital structure. C) decrease with greater debt in the capital structure.

Farmland- individuals, Timber and Raw land- istitutions, Timberland is bigger than farmland lot sizes

All three types of natural resource investments are illiquid, which means they can be difficult to sell. Farmland is typically held by individuals, while raw land and timberland are usually held by institutional investors. Timberland lot sizes are typically bigger than farmland lot sizes

Business Model (how it sells products or services)

An analyst is most likely to examine a company's channel strategy when evaluating the company's: Other ones Revenue drivers include top-down factors such as economic growth and bottom-up factors such as business segments or geography. Pricing power depends on an industry's structure and degree of competition.

noncooperation

An analyst writes the following about two nations: East Dumerde has a state-dominated domestic economy and conducts little foreign trade. West Dumerde uses its large economy and geophysical resource endowment to discourage other nations from criticizing its human rights record. In this analyst's opinion, the geopolitics of both East Dumerde and West Dumerde are most accurately described as: In this analyst's opinion, East Dumerde is best described as practicing autarky (nationalism and non-cooperation) and West Dumerde is best described as practicing hegemony (globalization and non-cooperation).

Cumulative preferred

An investor owns preference shares which stipulate that any dividend for the current period, as well as all past dividends, must be fully paid before a common stock dividend may be paid. This security is best described as:

outperform over time on a total return basis because it takes dividends into account

An investor purchases 1,000 shares of each of the stocks in a price-weighted index at their closing prices (ignore transactions costs). On a total return basis, if the index stocks remain the same, this portfolio will most likely:

approaches the peak of an expansion.

An unexpected increase in businesses' inventory-to-sales ratios is most likely to occur as an economy: At the end or peak of an expansion, economic activity begins to slow, sales are less than planned, and excess inventory accumulates, increasing inventory-to-sales ratios. To reduce inventory-to-sales ratios to desired levels, firms decrease production, which is one of the causes of a contraction.

Interim SEC Filings

Besides the annual SEC filings, an analyst should examine a company's quarterly or semiannual filings. These interim filings typically update the major financial statements and footnotes, but are not necessarily audited. Annual reports to shareholders and press releases are written by management and are often viewed as public relations or sales materials.

Remember this

Bond 1 is an option-free, 3% semiannual coupon, 5-year bond. Bond 2 is a callable bond that is otherwise identical to Bond 1. Compared to Bond 1, Bond 2 has a(n): The option-adjusted price is the value a bond would have if its embedded option were removed. In this case, removing the embedded option from Bond 2 would make it identical to Bond 1.

Forwards and contingent claims

Both a forward commitment and a contingent claim have returns that are leveraged compared to a spot market investment. Because options have premiums (i.e., positive values at initiation) and one-sided payoffs, we must use a different arbitrage and replication approach than the approach we use for forward commitments, which have values of zero at initiation and symmetrical payoffs.

B

Conditions that most likely support a high weight of debt in a company's capital structure include: A) operating in a cyclical industry. B) using a subscription-based revenue model. C) having a high degree of operating leverage. Because of the interest and principal obligations associated with debt financing, a company must be relatively stable to support the payments as they come due. Subscription-based revenue models, where customers pay monthly or annual recurring fees, are typically more predictable and stable than pay-per-use revenue models. Operating in a cyclical industry or with a high degree of operating leverage is more consistent with having a relatively low weight of debt in the capital structure.

B

Derek Stevens, CFA, manages the pension plan assets of Colors, Inc. When voting proxies for plan equities, Stevens owes a fiduciary duty to: A) the plan trustees who hired him. B) the plan participants and beneficiaries. C) the managers, stockholders, and bondholders of Colors, Inc., equally.

stock A

Do Capm for each to get get RRR and compare it to the estimated return whichever has a lower estimated return from RRR is the one they would not recommed

True

During periods of rising prices, liquidating inventory is a potential way for companies that use the LIFO inventory cost method to report higher current-period earnings, but LIFO is not permitted under IFRS. Managers attempting to influence analysts' opinions may manipulate accounting assumptions or emphasize non-GAAP measures in their financial reports.

time value

During the life of an option, the amount by which its price is greater than its exercise value is most accurately described as its:

True

Economic tools of geopolitics are categorized as either cooperative or noncooperative. Voluntary export restraints are an example of a noncooperative economic tool.

decreased estimate of future probability

For 20X1, Belcher Motors reported a decrease in its deferred tax liabilities, a decrease in its deferred tax assets, and an increase in its valuation allowance. To an analyst, this would most likely suggest that the company has: A) decreased its estimate of future profitability. The increase in the valuation allowance tells us that the company has decreased its estimate of its future profitability and thus its ability to realize the benefits of its deferred tax assets. A longer period for recognition of unearned revenue would not affect the temporary differences reflected in deferred tax assets. Increasing the estimate of assets' useful lives would tend to slow financial statement depreciation relative to depreciation for tax, which would increase deferred tax liability going forward, other things constant. Decreases in the carrying values of both a DTL and a DTA may reflect a decrease in the tax rate.

slope and riskiness

For a stock that has a beta of 0.95, it is most likely that: A) the slope of its characteristic line is 0.95. This stock is 95% as volatile as the market, and the covariance of its return with the market return is 95% of the variance of the market return.

loosely know this

For firms that revalue assets upward, IFRS requires disclosure of the date the asset was revalued, how management determined its fair value, the asset's carrying value using the historical cost model, and (for intangible assets) whether the asset's useful life is finite or indefinite. Although assets and shareholders' equity will increase as a result of the revaluation, net income will not increase. The increase in the value of the asset is reported as a revaluation surplus in shareholders' equity. Amortization expense will not increase because indefinite-lived intangible assets are not amortized.

convergence forecasts

Forecasts of convergence to a base rate are most appropriate for established industries for which structural changes are unlikely. This approach is likely to underestimate the volatility of cyclical industries. For growth industries and others experiencing rapid change, estimating a base rate may be difficult or inappropriate

B

From the point of view of a financial analyst, when evaluating companies that use different inventory cost assumptions, in a period of: B) decreasing prices, FIFO inventory is preferred to LIFO inventory. The most useful estimates of inventory and cost of sales are those that best approximate current cost. Whether prices are increasing or decreasing, FIFO provides a better estimate of inventory values, and LIFO provides a better estimate of cost of sales. If prices are stable, there is no difference between LIFO and FIFO estimates of inventory or cost of sales.

In future periods, the lower valued inventory will result in lower cogs and higher net income- Increases current NI and reduces it in the future

Greene Company discloses that its net income for the most recent period was reduced by a writedown of inventory to net realizable value. What effect is the inventory writedown most likely to have on Greene's net income in future periods?

C

Hedge Funds Unlimited, a global hedge fund, has publicly acknowledged in writing that it has adopted the CFA Institute Code and Standards as its policies. Which of the following is least likely a violation of the firm's policies? A) An analyst at the firm working overseas uses material nonpublic information as allowed by local law to make investment decisions for discretionary client accounts. B) A junior analyst at the firm uses a subscription to his local newspaper and the opinions of his friends and colleagues to make investment recommendations for discretionary client accounts. C) A CFA candidate at the firm, who is registered for the Level III exam, includes reference to participation in the CFA program and her status as a Level III candidate in her biographical background.

Solvency risk

If a company's forecast current liability balances reflect an undesirable net working capital position, the company is most likely faced with: Others Operational Risk- faulty organizational process, and human error will result in losses Accounting risk- the risk the company's policies will be deemed incorrect

Excess Kurtosis and Mean

If a return distribution has positive excess kurtosis, statistical models that do not account for the fatter tails will underestimate the likelihood of very bad or very good outcomes. A distribution with positive skewness will have a mean greater than the median and larger average positive deviations than average negative deviations.

Memorize

In the absence of taxes, there is no difference in cash flow between LIFO and FIFO. In addition, using LIFO would result in lower working capital (inventory is lower). Using LIFO would result in lower net income because of a lower gross margin (cost of goods sold is higher) Haltata Turf & Sod currently uses the first in, first out (FIFO) method to account for inventory. Due to significant tax-loss carryforwards, the company has an effective tax rate of zero. Prices are rising and inventory quantities are stable. If the company were to use last in, first out (LIFO) instead of FIFO: A) net income would be lower and cash flow would be higher. B) cash flow would remain the same and working capital would be lower. C) gross margin would be higher and stockholder's equity would be lower.

Risk shifting

In the context of risk management, entering an interest rate swap is an example of: Loosely know the below: When organizations decide to reduce or eliminate a risk, they may use risk shifting (e.g., buying forwards, futures, or swaps) or risk transfers (e.g., buy insurance). When organizations decide to bear a risk, they may use diversification to help them bear risk more efficiently.

Co-Investing

Investing directly in one or more of an investment fund's portfolio companies, in addition to investing as a limited partner in the fund.

Not strong form efficient

Mark Stewart is an executive of a publicly traded company in a country that has weak insider trading regulations. If Stewart can trade on insider information about his company and earn abnormal returns over time, the country's market may be most accurately characterized as If Stewart can earn abnormal returns by relying on insider information, the market cannot be strong-form efficient. However, this by itself does not imply anything about lower-form efficiency.

open vs. closed ended funds

Open-end funds redeem existing shares or issue new shares in accordance with investor demand. Closed-end fund shares are fixed in number and trade on exchanges as though they were common stock.

C

Other things equal, for a profitable company, issuing debt to repurchase outstanding stock will most likely: A) decrease net income and ROE. B) increase net income but not necessarily ROE. C) decrease net income with an indeterminate effect on ROE. Increasing financial leverage will increase interest expense and reduce net income. The share repurchase will decrease equity as well, so the effect on ROE is indeterminate

Risk free rate is higher than

Other things equal, the value of a long position in a forward contract priced at F(0)T will most likely be higher during its life at time t if the: A higher RFR increases a long forward- lower costs or higher benefits from holding the underlying will decrease the value of a long forward

parallel shifts in the yield curve

Portfolio duration most accurately approximates the sensitivity of the value of a bond portfolio to: Other Key rate duration may be used to estimate interest rate risk for non-parallel shifts in the yield curve.

is newly issued

Primary market transactions are those that involve newly issued securities A securities transaction is said to take place in the primary market if the security:

not violated the Standards.

Robert Miguel, CFA, is a portfolio manager. On Saturday, one of his clients invited Miguel and his wife to be his guests at his luxury suite for a major league baseball playoff game, which they did. Miguel told his supervisor on Monday that they had attended the game with the client and that the suite was luxurious. Miguel has: In this case, Miguel has not violated the standards. For a gift from a client in appreciation of past service or performance, informing his supervisor verbally is sufficient. Standard I(B) Independence and Objectivity requires disclosure prior to accepting the gift "when possible," but in cases such as this when there is short notice, notification afterward is permitted.

B

Shan Ang, CFA, is a portfolio manager at Huang Investments. Lian Jan, an old friend of Ang's, is an executive recruiter in the same city. Jan proposes that she will refer any high-level executives that she places locally to Ang, in exchange for one round of golf at Ang's country club for each new client. According to the Standard concerning referral fees, Ang would be required to disclose this referral arrangement: A) only to all prospective clients referred by Jan. B) to his employer and all prospective clients referred by Jan. C) to all prospective clients, current clients, and his employer.

A

Sue Johnson, CFA, has an elderly client with a very large asset base. The client intends to start divesting her fortune to various charities. Johnson is on the Board of a local charitable foundation. Johnson most appropriately: A) must not discuss anything regarding her client and her client's intentions with the charitable foundation without permission. B) can discuss her client's situation with the charitable foundation as long as she informs other local charities of her client's intentions. C) can make this known to the charitable foundation so that they can solicit the client, since it is the client's wish to divest assets to charities in the future.

Contingency tables

Tests of independence are based on

The same sample size

The bootstrap method of estimating the standard error of sample means involves drawing repeated samples from a data set, each with: The jackknife method involves calculating multiple means from the same sample, each with one observation removed, and calculating the standard deviation of those means.

duration and convexity

The factors that change both are the same Bonds will have greater maturity/duration when the coupon is lower, longer the time to maturity, and the lower the yield to maturity

Receipt of payments is not one of the required steps described by accounting standards to recognize revenue.

The five steps required for a company to record revenue are least likely to include: A) identifying a customer contract. B) receiving proportional payments. C) identifying separate performance obligations in the contract.

Supervisory

The group of independent directors in a company serves on? Staggered board- refers to the frequency of individual hire

main benefit of permissionless networks

The main benefit of permissionless networks is that there is no single point of failure due to the consensus mechanism; every node stores a copy of the transaction database. Permissionless networks are less cost efficient than permissioned networks because decentralization usually requires more processing power. Permissionless can be slower with a large number of members.

Sponsored depository receipt

The owner of a sponsored DR share has the same voting rights and receives the same dividends as the owner of a common share of the firm. With an unsponsored DR, the depository bank retains the voting rights. A global depository receipt may be sponsored or unsponsored.

horizontal common size balance statement

The presentation format of balance sheet data that standardizes the first-year values to 1.0 and presents subsequent years' amounts relative to 1.0 is: A vertical common-size balance sheet expresses all balance sheet accounts as a percentage of total assets and does not standardize the initial year.

Chi-Square Statistic

The type of test statistic that is used to to determine whether the population variance is equal to a chosen value

A

To comply with the Code and Standards, analysts who send research recommendations to clients must: A) keep records of all the data and analysis that went into creating the report. B) send recommendations only to those clients for whom the investments are suitable. C) not send recommendations without including the underlying analysis and basic investment characteristics. Standard V(C) Record Retention requires members to maintain records of the data and analysis they use to develop their research recommendations. Recommendations may be brief, in capsule form, or simply a list of buy/sell recommendations. A list of recommendations may be sent without regard to suitability, including both safe income stocks and aggressive growth stocks, for example.

A

Under Modigliani and Miller's assumptions and with NO taxes, the value of a firm is: A) unaffected by its capital structure. B) maximized with an all-debt capital structure. C) maximized with an all-equity capital structure. Under Modigliani and Miller's assumptions, in the absence of taxes a firm's capital structure does not affect its value. If taxes exist while the rest of their assumptions hold, Modigliani and Miller conclude a firm would finance itself entirely with debt to maximize its value.

Risk averse investor's demand curve

Upward curve as the investor wants to be compensated for the risk that they take With expected return on the Y-axis (vertical) and portfolio risk as measured by standard deviation on the X-axis (horizontal), a risk-averse investor's indifference curves will:

value add and core plus

Value Add is more like equity Core-plus and mortgage backed function more like fixed income

Approximate modified duration formula

Value of decrease- value of increase/2*starting value (par)*change in yield in bps

They must equal

When a project has a net present value (NPV) of zero, this necessarily implies that the project's internal rate of return (IRR) is equal to the required rate of return. Here, the required rate of return is the weighted average cost of capital of 5.75%. The internal rate of return will incorporate the present value of all inflows and outflows (including the initial investment), and because the NPV is zero, the IRR must also be equal to 5.75%

Keep in mind

When determining an investor's risk tolerance, an advisor should analyze the investor's personal situation, but should also gauge the investor's attitude toward risk. Risk tolerance is affected by the investor's psychological profile (i.e., willingness to take risk) as well as by the investor's ability to take risk. Age is an important influence on risk tolerance; younger investors generally are more able to withstand short-term losses because they have a longer time horizon in which to recover. Investors with high net worth are also more able to withstand short-term losses than investors with lower net worth, and thus tend to be more tolerant of risk.

A

Which of the following is least likely included in the CFA Institute Code of Ethics? Members of CFA Institute must: A) place their clients' interests before their employer's interests. B) strive to maintain and improve the competence of others in the profession. C) use reasonable care and exercise independent professional judgment. The requirement that members and candidates place their clients' interests before their employer's or their own is in Standard III(A) Loyalty, Prudence, and Care. The other choices are included in the CFA Institute Code of Ethics.

This is the only example provided that is a motivation (the other two were opportunities)

Which of the following is most likely a motivation for a company's management to issue low-quality financial reports? A) Management has provided optimistic earnings guidance. Meeting or exceeding its own earnings guidance is a possible motivation for management to issue low-quality financial reports. Inadequate board oversight and wide ranges of acceptable accounting treatments are more appropriately viewed as opportunities for issuing low-quality financial reports.

Operating profit margin can be read directly from a common size income statement, ROE and TAT mix b/s and i/s items

Which of the following is most likely presented on a common-size balance sheet or common-size income statement? A) Total asset turnover. B) Operating profit margin. C) Return on common equity.

B

Which of the following is one of the eight major sections of the GIPS standards for firms? A) Independent Third-Party Verification. B) Input Data and Calculation Methodology. C) Guidelines for Attributing Performance to Sub-Advisers.

Assume that the spot exchange rate between the currency of Xyzia (XYZ) and the U.S. dollar (USD) is 1.264 XYZ/USD, while the spot exchange rate between the euro (EUR) and the USD is 1.083 EUR/USD. The XYZ/EUR exchange rate is closest to:

XYZ/EUR cross rate = (XYZ/USD) / (EUR/USD) = 1.264 / 1.083 = 1.167.

inflection point

a place where future performance is likely to be different than the past

mental accounting bias

a type of bias that involves seeing each asset in the context of achieving a specific goal

Abandonment option

allows a company to exit a project if it no longer expects the project to provide a positive net present value going forward. A timing option allows a company to delay a project. Flexibility options refer to changing prices, output quantities, or production inputs.

covered bonds

are an obligation of the corporation that issues them, but their interest and principal payments are provided by a pool of assets that are legally recognized as bankruptcy remote. They are different from securitized bonds (i.e., asset-backed securities), which are issued by a special purpose entity to which the underlying assets are sold

Yes, because the shifts in the yield curve may be non parallel (inverted yield curve)

can lower duration bonds have more price volatility than longer duration bonds

effective duration

changes in bonds cash flows that result from changes in yield would be reflected in the bond's Effective duration and effective convexity capture the effects from changes in a bond's cash flows when the yield changes (e.g., an increase in the likelihood of a bond being called when its yield has decreased). For this reason, they are the appropriate measures of interest rate sensitivity for bonds with embedded options.

An analyst estimates a stock has a 40% probability of earning a 10% return, a 40% probability of earning a 12.5% return, and a 20% probability of earning a 30% return. The stock's standard deviation of returns based on this returns model is closest to:

expected value= 15% (prob*expected return) Variance (prob return-expect return)(prob .4)squared add to get variance then sqr root to get st. dev

A portfolio is invested 30% in Asset X with the remainder invested in Asset Y. Asset X has an expected return of 6% and variance of returns of 0.031, while Asset Y has an expected return of 7% and variance of returns of 0.045. The covariance between the returns of the two assets is 0.03735. The standard deviation of returns for the portfolio is closest to

first do correlation CovAB/StdevXStdevy (square root of variance) Then multiply the weight .3, .7 by the St. Devs (sqr root of .031 IE)

net cost of carry

is equal to the cost of capital + storage cost - convenience yield. An increase in the convenience yield will decrease the net cost of carry.

margin call

original price (1-initial margin)/1-maintenance margin

Shortfall Risk

refers to the probability that a return is less than a chosen minimum threshold level. is the other choices refer to downgrade risk and default risk.

Spurious

relationships and patterns are likely to result from overfitting, which describes a model that is too complex and treats noise as true parameters.

Long RFR, Long Call, Short Underlying

same cash flows as the put option (put call parity)

during the execution step

when does a PM set top down analysis Planning- focuses on production of the IPS Feedback- monitor changes in clientel to make tweaks to the portfolio as seen fit

Management Buy In

when the management team of a public company is replaced by the private equity manager in a LBO fund Other type Management buyout where the existing team largely stays in place