SIE Understanding Products and Their Risks Question 79: Answer and Explanation

Question: 79

Which of the following statements is true regarding the Institute for Portfolio Alternatives (IPA)?

• A. The IPA is devoted to the real estate industry.
• B. The IPA promotes Portfolio Diversifying Investments (PDI).
• C. The IPA promotes maintaining a stable business environment with limited change in regulation.
• D. The IPA works in the private sector, without significant communication outside its membership.

Correct Answer: B

Explanation:

B: Choice B is true because the Institute for Portfolio Alternatives actively encourages development of opportunities to purchase assets whose business patterns are not likely to match that of traditional investments, such as stocks and bonds. Choice A is untrue, because the IPA relates not only to real estate markets such as non-listed REITs, but also interval funds, opportunity zone funds, business development companies (BDCs) and other private placements whose investments may not be devoted exclusively to real estate. Choice C is untrue because the IPA is an advocate of changes which are expected to result in better future results. Choice D is incorrect because IPA communicates with securities regulators and maintains public relations activity to educate people about non-traditional investments.