Sadka (2010) Shows That Exposure to Unexpected Declines in ________

question 7

Multiple Choice

Sadka (2010) shows that exposure to unexpected declines in ________ is an important determinant of average hedge fund returns, and that the spreads in average returns across funds with the highest and lowest ________ may be as much as 6% annually.

• A) market risk; systematic risk
• B) market liquidity; liquidity risk
• C) unsystematic risk; unique risk
• D) default risk; default risk

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Definitions:

Variable Maintenance Cost

Expenses for maintenance that fluctuate depending on the level of activity or usage of equipment.

Machine-Hours

The total hours that machines are actually operating and producing outputs in a manufacturing setting.

Sales Commissions

Payments made to salespersons or employees based on the sales they generate, often calculated as a percentage of the sales volume.

Sales Volume

The quantity of units of merchandise sold or services rendered over a specific period.