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Basic Question 7 of 9

Which of the following statements most accurately describes hedge fund performance issues?

I. Hedge fund data bases often suffer from survivorship bias.
II. Hedge fund reporting is voluntary and unregulated.
III. Individual asset pricing in hedge funds is controlled by the portfolio manager.
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User Contributed Comments 6

User Comment
rufi WHY THERE ARE SO LITTLE INFO ABOUT THE HEDGE FUNDS
mordja because of the lack of regulation there is no involuntary provision of data, such as there is for a listed stock. If you have the option of providing data, you will only do so if it is in your best interests.
schweitzdm Anyone care to provide additional comments on III?
ankurwa10 I don't think III is entirely true. because PMs essentially pick an asset class e.g. real estate. So, if a PM to a Fund that buys real estate on behalf of investors, needs to provide value, it would depend on assessors. Similarly, for fund of funds, it depends on outside managers to provide the valuation. So, overall one can say that since there is no ready made market made price, what PM decides to pay (of course on the basis of available valuation IS the price, thus controlling the price, per the answer)
Inaganti6 in the real exam will you spend your time opining like this....
timkalt If the questions is on "most accurate", I would Chose just one answer. Same opinion anyone?
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Craig Baugh

Craig Baugh

Learning Outcome Statements

explain investment features of hedge funds and contrast them with other asset classes

describe investment forms and vehicles used in hedge fund investments

CFA® 2024 Level I Curriculum, Volume 5, Module 6.