#4 – CASE – 10-8: Ellie Enterprises
Required:
•Would any of these funds be considered alternative investments (i.e.,
investments without readily determinable fair value)? If so, why? (Alternative
investments are generally defined as investment vehicles (1) that are not listed on
national exchanges or over-the-counter markets or (2) for which quoted market
prices are not available.)
NOT ALTERNATIVE——-Cloudy Retirement Intermediate-Term U.S. Treasury
-Alternative investments do not have readily determinable fair values
-Alternative investments are assets that are not listed on any national exchanges or
over-the-counter markets, or for which quoted market prices are not available from sources
such as financial publications, the exchanges, or the National Association of Securities
Dealers Automated Quotations System [NASDAQ].
-These investments generally do not fall under any federal or state regulator and have
greater flexibility in investment strategies than registered investment companies.
-types of alternative investments or investment strategies used by benefit plans:
•Hedge funds —–Cloudy High-Yield Hedge Strategies
–Hedge funds are similar to mutual funds but are allowed to use aggressive strategies
typically not found in mutual funds, including selling short (i.e., leverage), and extensive
use of derivatives.
•Real estate funds—–Cloudy Real Estate All Stars
-Real estate funds, as their name suggests, invest in real estate ventures, and the valuation
of such investments will tend to follow the real estate market. The investment structure is
either a limited partnership or a corporation that typically involves a direct purchase of a
basic real estate property, and could provide for additional capital calls.
•Pooled separate accounts—–Cloudy Retirement 500 Index & Cloudy Retirement
Emerging Markets Stock Index
