Which of the Following Statements Is CORRECT

question 5

Multiple Choice

Which of the following statements is CORRECT?

• A) Hedge funds are legal in Europe and Asia,but they are not permitted to operate in the United States.
• B) Hedge funds are legal in the United States,but they are not permitted to operate in Europe or Asia.
• C) Hedge funds have more in common with investment banks than with any other type of financial institution.
• D) Hedge funds have more in common with commercial banks than with any other type of financial institution.
• E) Hedge funds are not as highly regulated as most other types of financial institutions.The justification for this light regulation is that only "sophisticated" investors (i.e. ,those with high net worths and high incomes)are permitted to invest in these funds,and these investors supposedly can do any necessary "due diligence" on their own rather than have it done by the SEC or some other regulator.

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Definitions:

Open-mindedness

The willingness to consider new ideas and opinions without preconceived judgments.

Equal Opportunity

The principle that all people should be treated similarly, without unreasonable discrimination or preference in areas like employment.

Cognitive Dissonance

A psychological phenomenon where an individual experiences discomfort from holding two or more conflicting beliefs, ideas, or values.

External Locus Of Control

This occurs in people who feel they have no control over the events in their lives.