A Hedge Fund Attempting to Profit from a Change in the Spread

question 41

Multiple Choice

A hedge fund attempting to profit from a change in the spread between mortgages and Treasuries is using a ______ strategy.

• A) market neutral
• B) directional
• C) relative value
• D) divergence
• E) convergence

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Definitions:

Aversive Stimulus

A negative or unpleasant stimulus that is used to influence behavior.

Termination

The process of ending or conclusion, often used in the context of psychotherapy to describe the conclusion of treatment.

Punisher

An aversive stimulus used in behavior modification to decrease the likelihood of a behavior reoccurring.

Aversive Stimulus

An aversive stimulus is any unpleasant or noxious event that induces a negative response in an organism, used to modify behavior.