SIE - Securities Industry Essentials Exam

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DPPs can be a great way to diversify into an asset that is not correlated with the direction of the equity market. What is one of the disadvantages of DPPs?

The ability to participate in the income producing ability of an investment
A
Inability to invest in precious metals
B
Lack of choices in the energy market
C
Lack of liquidity
D

Explanations

Illiquidity is a one of the disadvantages of a DPP. They are not listed on an exchange. DPPs allow for direct participation in the income producing ability of an investment and many DPPs are in the oil, gas and precious metals sectors.