Test 1 Afternoon

Question 63: Answer is A. PE firms have only market risk. In the SS (see page 135 top) it states that investors face both market risk and agency risk with PE firms. Which is correct??? Im really growing tired of the errors.

I did the same thing…f**g confusing s**t Reasoning behind this is… 1) Sverig is a startup and wouldnt hv an princ-agenct problem 2) L’offre which is a matured co. has all the mgmt staff replaced which eliminates management related issues… I knew its only mkt risk for 2) but got tricked in 1)… Can anyone else give a better reason for (1) ?

This guestion is just stupid. Thx though.