Chap026 - Chapter 26 - Hedge Funds Chapter 26 Hedge Funds...

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Chapter 26 - Hedge Funds Chapter 26 Hedge Funds Multiple Choice Questions 1. ______ are the dominant form of investing in securities markets for most individuals and ______ have enjoyed far greater growth rate in the last decade. A. Hedge funds; hedge funds B. Mutual funds; hedge funds C. Hedge funds; mutual funds D. Mutual funds; mutual funds E. none of the above Mutual funds are the dominant form of investing in securities markets for most individuals and hedge funds have enjoyed far greater growth rate in the last decade. Difficulty: Easy 2. Like mutual funds, hedge funds A. allow private investors to pool assets to be managed by a fund manager. B. are commonly organized as private partnerships. C. are subject to extensive SEC regulations. D. are typically only open to wealthy or institutional investors. E. B and D Like mutual funds, hedge funds allow private investors to pool assets to be managed by a fund manager. Difficulty: Easy 26-1
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Chapter 26 - Hedge Funds 3. Unlike mutual funds, hedge funds A. allow private investors to pool assets to be managed by a fund manager. B. are commonly organized as private partnerships. C. are subject to extensive SEC regulations. D. are typically only open to wealthy or institutional investors. E. B and D Unlike mutual funds, hedge funds are commonly organized as private partnerships and are typically only open to wealthy or institutional investors. Difficulty: Easy 4. Hedge funds typically ______ relative mispricing of specific securities and ______ broad market exposure. A. bet on; bet on B. hedge; hedge C. hedge; bet on D. bet on; hedge E. none of the above Hedge funds typically bet on relative mispricing of specific securities and hedge broad market exposure. Difficulty: Moderate 26-2
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Chapter 26 - Hedge Funds 5. Hedge funds ______ engage in market timing ______ take extensive derivative positions. A. cannot; and cannot B. cannot; but can C. can; and can D. can; but cannot E. none of the above Hedge funds can engage in market timing and can take extensive derivative positions. Difficulty: Moderate 26-3
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Chapter 26 - Hedge Funds 6. The risk profile of hedge funds ______, making performance evaluation ______. A. can shift rapidly and substantially; challenging B. can shift rapidly and substantially; straightforward C. is stable; challenging D. is stable; straightforward E. none of the above The risk profile of hedge funds can shift rapidly and substantially,making performance evaluation challenging. Difficulty: Moderate 7. Shares in hedge funds are priced A. at NAV B. a significant premium to NAV C. a significant discount from NAV D. B or C E. none of the above Shares in hedge funds are priced at NAV. Difficulty: Easy 26-4
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Chapter 26 - Hedge Funds 8. Hedge funds are typically set up as ______ and provide ______ information about portfolio composition and strategy to their investors. A.
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This note was uploaded on 01/08/2011 for the course MBA ECON taught by Professor Hamza during the Spring '10 term at Prince Sultan University.

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Chap026 - Chapter 26 - Hedge Funds Chapter 26 Hedge Funds...

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