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NEW QUESTION: 1
Which of the following is true about a hedge fund?
A. It is closed to all but sophisticated, wealthy investors.
B. It is more liquid than almost any investment other than a money market mutual fund.
C. It is designed to help investors hedge their risk and, as such, is a low risk alternative to a mutual fund.
D. It has very low management fees since it is passively managed.
Answer: A
Explanation:
A hedge fund is closed to all but sophisticated, wealthy investors. Hedge fund managers
engage in riskier strategies than mutual fund managers. They are fairly illiquid; the redemption of shares
is restricted. They are actively managed, and management fees are much higher than those charged by
other types of funds.
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A. Option D
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C. Option C
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Answer: C
Explanation:
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