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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 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 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. Hedge funds typically bet on relative mispricing of specific securities and hedge broad market exposure. Difficulty: Moderate 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 26-2
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Chapter 26 - Hedge Funds 6. The risk profile of hedge funds ______, making performance evaluation ______. The risk profile of hedge funds can shift rapidly and substantially,making performance evaluation challenging. Difficulty: Moderate
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