Which of the Following Investment Style Could Be the Best

question 16

Multiple Choice

Which of the following investment style could be the best description of the Long Term Capital Management market neutral strategies?

• A) Convergence arbitrage
• B) Statistical arbitrage
• C) Pairs trading
• D) Convertible arbitrage

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Definitions:

Lobby

The act of attempting to influence the decisions of government officials, typically by special interest groups.

Binding Price Ceiling

A maximum price set by the government below the equilibrium price, preventing suppliers from raising the price above it, leading to shortages.

Surplus

The situation in which the quantity of a good supplied exceeds the quantity demanded, often resulting in downward pressure on prices.

Price Ceiling

A legally established maximum price that can be charged for a good or service, aimed at preventing prices from becoming too high.