Exam 26: Hedge Funds

Hedge funds are prohibited from investing or engaging in

______ are the dominant form of investing in securities markets for most individuals but ______ have enjoyed a far greater growth rate in the last decade.

Hedge funds ______ engage in market timing ______ take extensive derivative positions.

______ bias arises when the returns of unsuccessful funds are left out of the sample.

Hedge funds exhibit a pattern known as a

______ bias arises because hedge funds only report returns to database publishers if they want to.

Hedge funds may invest or engage in

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.

Hedge fund strategies can be classified as ______.

Unlike mutual funds,hedge funds

Shares in hedge funds are priced

Sadka (2009)shows that exposure to unexpected declines in ________ is an important determinant of average hedge fund returns and that the spreads in average returns across funds with the highest and lowest ________ may be as much as 6% annually.

Hedge funds often employ ______ that require investors to provide ________ notice of their desire to redeem funds.

______ are subject to the Securities act of 1933 and the Investment Company Act of 1940 to protect unsophisticated investors.

Explain the five major differences between hedge funds and mutual funds.

Like mutual funds,hedge funds

Hedge fund performance may reflect significant compensation for ________ risk.

Hedge funds often have ______ provisions as long as ______,which preclude redemption.

The typical hedge fund fee structure is

Hedge funds are ______ transparent than mutual funds because of ______ strict SEC regulation on hedge funds.