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Thread: Private Equity

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    An Urch Guru Pundit Swami Sage cartera's Avatar
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    Private Equity

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    In past decades, private equity investors used to compete for exclusive participation in investments. Now, in response to both the growing scale of investments and increased competition to participate, private equity funds often form "clubs" or syndicates and jointly take positions in large investments. This approach allows them to spread some of the risk and also gain access to other investments and opportunities.

    Which of the following statements by a private equity investor best defines the changing attitude described in the argument above?

    A "We would rather beat our competition by working with them in order to find out their strengths and weaknesses."

    B "In order to keep up with our competition, we should stop investing small and only invest in very large opportunities."

    C "In order to make sure that we can participate in certain investments, we should expect to cooperate with our competition on occasion."

    D "To avoid taking any risks, it is necessary to stop competing with our former competitors."

    E "In response to changing market conditions, we should participate only in investments that allow us to take better positions than our competitors."

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    Imo C

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    What a classic one --> A "We would rather beat our competition by working with them in order to find out their strengths and weaknesses."

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    An Urch Guru Pundit Swami Sage
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    Would go with (C) but the only hesitation is the word "competition" instead of "competitors"

    C "In order to make sure that we can participate in certain investments, we should expect to cooperate with our competition on occasion."

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    Within my grasp! vikram_k51's Avatar
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    Private Equity
    In past decades, private equity investors used to compete for exclusive participation in investments. Now, in response to both the growing scale of investments and increased competition to participate, private equity funds often form "clubs" or syndicates and jointly take positions in large investments. This approach allows them to spread some of the risk and also gain access to other investments and opportunities.

    Which of the following statements by a private equity investor best defines the changing attitude described in the argument above?

    A "We would rather beat our competition by working with them in order to find out their strengths and weaknesses." ------>No

    B "In order to keep up with our competition, we should stop investing small and only invest in very large opportunities." --->No

    C "In order to make sure that we can participate in certain investments, we should expect to cooperate with our competition on occasion." --->keep it

    D "To avoid taking any risks, it is necessary to stop competing with our former competitors." ---->No

    E "In response to changing market conditions, we should participate only in investments that allow us to take better positions than our competitors."--->No


    Will go with C

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    is it another bear trap ? bear&bull's Avatar
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    Quote Originally Posted by cartera View Post
    In past decades, private equity investors used to compete for exclusive participation in investments. Now, in response to both the growing scale of investments and increased competition to participate, private equity funds often form "clubs" or syndicates and jointly take positions in large investments. This approach allows them to spread some of the risk and also gain access to other investments and opportunities.

    Which of the following statements by a private equity investor best defines the changing attitude described in the argument above?

    A "We would rather beat our competition by working with them in order to find out their strengths and weaknesses."


    THIS WOULD MEAN SOME ONE ELSE WOULD KNOW THEIR STRENGTHS AND WEAKNESS TOO AND THIS CAN BACKFIRE .( BEAT THEM IN THEIR OWN GAME)

    B "In order to keep up with our competition, we should stop investing small and only invest in very large opportunities." THE ARGUMENT TALKS ABOUT SMALL INVESTMENTS AND NOT THAT SMALL SHOULD BE IGNORED

    PASSAGE : often form "clubs" or syndicates and jointly take positions in large investments.



    C "In order to make sure that we can participate in certain investments, we should expect to cooperate with our competition on occasion."

    D "To avoid taking any risks, it is necessary to stop competing with our former competitors."

    THEY SHARE RISK . NOT ERADICATE RISKS
    FROM PASSAGE : spread some of the risk

    E "In response to changing market conditions, we should participate only in investments that allow us to take better positions than our competitors."


    ARGUMENT MENTIONS OFTEN AND NOT ONLY THAT TAKE US TO A BETTER POSITION
    FROM PASSAGE :
    often form "clubs" or syndicates
    IMO C

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