Higher Returns of Equity Hedge Funds as Compared to the S&P

question 9

Multiple Choice

Higher returns of equity hedge funds as compared to the S&P 500 index reflect positive compensation for __________ risk.

• A) market
• B) liquidity
• C) systematic
• D) interest rate

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Definitions:

Dilution %age Ownership

The reduction in existing shareholders' ownership percentage of a company as a result of the company issuing more shares.

Rights Offering

An offer to existing shareholders to purchase additional shares in the company at a discount to the market price within a fixed period.

Corporate Finance

Involves managing a company's financial activities, including investments, capital structuring, and long-term financial planning.

Rights Offering

A financial process by which a company offers its existing shareholders the opportunity to purchase additional shares at a discounted price before offering them to the public.