Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 8 of 9
A hedge fund manager invests in a pair of related securities. when the prices of the two securities diverge - meaning one security rises in value and the other security falls in value - the hedge fund manager buys one security and shorts the other. When the prices converge again, the hedge fund manager closes the trade. This strategy is known as:
B. relative value strategy.
C. market neutral strategy.
A. activist strategy.
B. relative value strategy.
C. market neutral strategy.
User Contributed Comments 1
| User | Comment |
|---|---|
| Rohule | not arbitrageur as well? |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
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.