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The Difference Between Market Neutral and Long/short Hedges Is That

Question 27

Multiple Choice

The difference between market neutral and long/short hedges is that market neutral hedge funds ________.


A) establish long and short position on both sides of the market to eliminate risk and to benefit from security asset mispricing, whereas long/short hedge establish positions only on one side of the market
B) allocate money to several other funds while long/short funds do not
C) invest in relatively stable proportions of shares and bonds while the proportions may vary dramatically for long/short funds
D) invest only in equities and bonds while long/short funds use only derivatives

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