Which of the Following Statements Regarding 130/30 Strategies Is FALSE

question 14

Multiple Choice

Which of the following statements regarding 130/30 strategies is FALSE?

• A) Analysts can make full use of their knowledge of undervalued and overvalued stocks.
• B) Long positions up to 130 percent of the value of the portfolio can be made.
• C) Short positions up to 30 percent of the value of the portfolio can be made.
• D) 130/30 strategies are not very popular due to the increased risk of hedging.
• E) The use of short positions creates leverage.

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