Question

PLEASE ANSWER CORRECT RESPONSE

1.Why are accredited investors allowed to invest in any company?

A. They need less protection

B There is an assumption of competency

C We want rich people to get richer

D A and B

E All of the above

2.People who invest their own money do not have what?

A asset allocation

B risk factors

C fiduciary duty

D common sense

3.A retiree gives money to an institutional investor and asks the investor to only invest in high risk investments. The investor does not have access to the top performing VC funds, however the investor is required by to comply with the requests of the retiree. The investor has no option but to invest in the low performing funds. The retiree’s capital is lost on a bad investment in "Sniff: The Tinder for Dogs."
Why is the investor required to comply with the requests of the retiree?

A The investor is unskilled at investing

B the investor wants to generate returns

C The investor has adverse interest

D The investor has duty of obedience

4.A retiree gives money to an institutional investor and asks the investor to only invest in high risk investments. The investor does not have access to the top performing VC funds, however the investor is required by to comply with the requests of the retiree. The investor has no option but to invest in the low performing funds. The retiree’s capital is lost on a bad investment in "Sniff: The Tinder for Dogs."
What is this an example of what?

A. Unintended consequences

B Socialism

C Capitalism

D Tragedy of commons

5.What is not a good reason to raise money from a VC?

A Expand your network

B Retain control of your company

C use money to grow faster

D Brag about your fundraise to help you hire

6. You own $30 of stock in Twitter. You fail to call into the annual stockholder meeting and vote on the company’s corporate governance issues because you had a school project due that day, which was more important to you than the stockholder meeting. What is this called?

A Mismanagement

B Rational apathy

C Lack of millionaire mindset

D All of the above

7.You are an entrepreneur pitching an interesting market opportunity in the food industry to an angel investor. Specifically, the opportunity is to sell apple-based products. The market opportunity is worth $50M.
The investor asks “What is going to stop Apple from pursuing this opportunity?”
Which is a NOT good response?

A Apple is a $1.3T company. The opportunity is too small for Apple

B It would take Apple a long time to decide to get into Apples

C Apple's existing stakeholders have an interest in Apple staying in technology

D Apple does not have a IP in the apple industry

Answer 1

1.A They need less protection

Accredited investors are those that have the authority to deal in those securities which general public is not allowed to invest in.These investors need less protection. as they are thought to be more financially stable.

2.C fiduciary duty

When investors invest their own money they do not have fiduciary duty as fiduciary duty involves an obligation of one party to act in a manner which is in the best interest of another party.

3.D The investor has duty of obedience

The investor must act in the favor of the person or institution it is working for,it is its duty of obedience to comply with the goals of the person or he or she is working for.

4.A Unintended consequences

Unintended consequences are not intentionally made as investor had no other option but to invest in low performing funds,thus it is an example of unitended consequences.