Which of the Following Statements Is(are) Correct Concerning Hedge Funds

question 113

Multiple Choice

Which of the following statements is(are) correct concerning hedge funds?
I. They are highly regulated.
II. They hedge all positions to limit risks.
III. Management and other fees are extremely low compared to other types of funds.
IV. Access is limited to institutions and high net worth or high income individuals.

• A) I, II and III only
• B) II and IV only
• C) IV only
• D) I, II, III and, IV

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Definitions:

Perfectly Inelastic

A situation in which the quantity demanded or supplied does not change regardless of changes in price.

Purely Competitive

A purely competitive market is characterized by many buyers and sellers, homogeneous products, and no single entity having market control, leading to price determination by supply and demand forces.

Elastic

Refers to the degree to which the demand or supply for a product or service changes in response to a change in price.

Downsloping

Describing a curve or line that moves from a higher to a lower point, often used to illustrate the downward trend in price and quantity relationships in economics.