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.

---

Definitions:

Product Price

The amount of money charged for a good or service in the market.

Purchases Increase

A rise in the quantity of goods or services bought over a specific period of time.

Price Change

A variation in the cost of a good or service over time, influenced by factors like supply, demand, and inflation.

More Elastic

Describes a situation where the demand or supply for a good or service is highly responsive to changes in price.