Performance Evaluation of Hedge Funds Is Complicated by

question 4

Multiple Choice

Performance evaluation of hedge funds is complicated by

• A) liquidity premiums.
• B) survivorship bias.
• C) unreliable market valuations of infrequently-traded assets.
• D) merger arbitrage.
• E) All of the options are correct.

---

Definitions:

Make or Buy

A decision-making process used by companies to determine whether they should produce goods internally or purchase them from an external supplier.

Indirect Spend

Expenses incurred for materials, services, and maintenance that do not directly contribute to the production of goods.

Direct Spend

Expenses directly tied to the production of goods or services, such as raw materials and labor.

Outsourced

The practice of having certain job functions or processes handled outside of the company, typically by a third party, to reduce costs or focus on core competencies.