25. Which of the following statements is/are TRUE regarding Hedge Funds? CIRCLE

Question

25. Which of the following statements is/are TRUE regarding Hedge Funds? CIRCLE ALL THAT APPLY (2 points) Hedge Fund managers are required to engage in transactions which are "market neutral" by establishing fully-hedged trading positions which bear no risk. Hedge Funds offer an opportunity for a small investor to invest alongside much larger investors by setting the minimum investment at $1,000. Hedge Funds are prohibited by federal regulation from using lines of credit to borrow money with which to leverage their investments. Hedge Funds may engage in a wide variety of financial transactions including venture-capital investing and investing in distressed securities. a. b. c. d.

Explanation / Answer

Option c and d are TRUE statement regarding Hedge funds,that

Hedge Fund may engage in a wide variety of financial transactions including venture-capital investing and investing in distressed securities and also that Hedge funds are prohibited by federal regulation from using lines of credit to borrow money with which to leverage their investments just because  A hedge fund is an investment fund that pools investors' money.and employ a wide range of investment strategies .These funds have some restriction on withdrwals,and they are not required to publish the net asset value on a daily basis.Due to this restriction on withdrawals their assets change or make less liquid than those in mutual funds.The fees of these funds are high ,the fees of the mutual funds are often less than these funds and their fees may include a percentage of assets under management and a percentage of the gains.

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