Hedge funds may invest or engage in a distressed

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15. Hedge funds may invest or engage in A. distressed firms B. convertible bonds C. currency speculation D. merger arbitrage E. all of the above Hedge funds may invest or engage in distressed firms, convertible bonds, currency speculation, and merger arbitrage. Difficulty: Moderate 16. Hedge funds are prohibited from investing or engaging in Hedge funds may invest or engage in distressed firms, convertible bonds, currency speculation, and merger arbitrage. Difficulty: Moderate 17. Hedge funds often have ______ provisions as long as ______, which preclude redemption. Hedge funds often have lock-up provisions as long as several years, which preclude redemption. Difficulty: Moderate 26-7
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Chapter 26 - Hedge Funds 18. Hedge fund strategies can be classified as ______. Hedge fund strategies can be classified as directional and non-directional. Difficulty: Moderate 19. A hedge fund pursuing a ______ strategy is betting one sector of the economy will outperform other sectors. A. directional B. non-directional C. stock or bond D. arbitrage or speculation E. none of the above A hedge fund pursuing a directional strategy is betting one sector of the economy will outperform other sectors. Difficulty: Moderate 20. A hedge fund pursuing a ______ strategy is attempting to exploit temporary misalignments in relative pricing. A hedge fund pursuing a non-directional strategy is attempting to exploit temporary misalignments in relative pricing. Difficulty: Moderate 26-8
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Chapter 26 - Hedge Funds 21. A hedge fund pursuing a ______ strategy is trying to exploit relative mispricing within a market, but is hedged to avoid taking a stance on the direction of the broad market. A hedge fund pursuing a market neutral strategy is trying to exploit relative mispricing within a market, but is hedged to avoid taking a stance on the direction of the broad market. Difficulty: Moderate
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