A Hedge Fund Pursuing a ______ Strategy Is Trying to Exploit

question 42

Multiple Choice

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.

• A) directional
• B) nondirectional
• C) market neutral
• D) arbitrage or speculation
• E) nondirectional and market neutral

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Definitions:

Corporate Double Taxation

A tax principle where a corporation's income is taxed at both the corporate level and again as shareholder dividends at the personal level.

Personal Liability

The responsibility of an individual to bear the loss or to repay the debt from their own assets.

Operating Agreement

A document that outlines the governance and operating procedures of a limited liability company (LLC) among its members.

LLC

Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.