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Question:
Volatility strategies are categorized under relative value strategies.
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Over time, compared to traditional stock and bond investments, the commodities asset class has exhibited:
lower returns and higher price volatility.
An equity hedge fund that uses technical analysis techniques to identify undervalued shares to buy and overvalued shares to sell short is best described as pursuing a(n):
quantitative directional strategy.
Private investments in public equities (PIPEs) are most likely examples of which of the following private equity investment strategies?
Minority equity investing
Which provision of a hedge fund’s incentive fees is designed to prevent investors from paying multiple incentive fees for the same performance?
High water mark.
Which of the following statements with respect to hedge fund investing is least accurate?
Survivorship bias in hedge fund data causes risk to be overstated because funds that take on more risk tend to have higher returns.
Compared with purchasing commodities, long positions in commodity derivatives offer the benefit of:
no storage costs.
Compared to investing in commodities, investing in farmland is most likely to provide which of the following benefits?
Higher income.
Which of the following strategies is most likely to be pursued by a private equity fund?
Use debt financing to acquire control of a publicly traded firm.
Distressed investing is least likely an example of:
Real estate strategies.
Which of the following is least likely a benefit of fund of funds (FOF) investing?
The fee is generally quite reasonable since the investor only pays the manager of the FOF.
A leveraged buyout firm that carries out a secondary sale has:
exited an investment in a portfolio company.
Compared to traditional investment managers who invest in long-only stocks and bonds, alternative investment managers typically invest in assets that are:
less regulated, less transparent, and less liquid.
A hedge fund that requires incentive fees to be calculated only on the portion of returns above a benchmark return is said to have a:
hard hurdle rate.
Compared to brownfield infrastructure investments, greenfield infrastructure investments are more appropriate for investors with:
longer time horizons and lower liquidity needs.
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