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✨ EY Prep 🩷
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Private Equity
🎲 Mixed
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What is the J-curve effect in private equity?
A.
Portfolio companies grow revenues in a J-shape as they scale
B.
Fund returns are initially negative due to fees and unrealised investments, then rise as exits materialise
C.
The fund's NAV follows a J-shape when plotted against interest rates
D.
IRR increases in a J-shape due to compounding over the fund life