Anyone else (that did the BSAS) find this question confusing. I mean I get the fact that alternative investments are illiquid and typically necessitate a long time horizon, but why is this not an issue for a pension fund. Is it simply because a very low amount of the fund’s asset would be invested into these investments and therefore they do not have a material effect on the overall liquidity of the fund? J. BTW I answered A to this one…
pensions usually have very long time horizons (more so if its an ongoing plan and not a frozen one in which there would be no new participants into the plan). still they have a long time horizon somewhere between 30-50 yrs long. so they are suited to invest in alternate investments with low liquidity and relatively longer time horizons than traditional stocks and bonds.
edit: ignore my previous reply. misunderstood the whole thing.
I went with A too here. I though we were taught not to infer anything beyond what’s given in the vignette. Which looks totally not true if B is the answer to this Q56.