2017 Mock AM - Q43

Why is he correct about return premium? Some alts are illiquid and command a return premium, yes, but 2 out of 6 alt “types” CFA gives us are very liquid - commodities and managed futures. Futher, fund of funds for PE and HF can be pretty liquid as well. Bad question or am I in the weeds too much?

Return premium due to illiquidity premium. In general, alternative investments are characterised as illiquid. Exception could be REITs…