Study Notes: Fund Management

Chapter 3. Fund Management Study Notes will cover the following learning objectives:

* Differentiate among open-end mutual funds, closed-end mutual funds, and exchange-traded funds (ETFs).

* Identify and describe potential undesirable trading behaviors at mutual funds.

* Calculate the net asset value (NAV) of an open-end mutual fund.

* Explain the key differences between hedge funds and mutual funds.

* Calculate the return on a hedge fund investment and explain the incentive fee structure of a hedge fund including the terms hurdle rate, high-water mark, and clawback.

* Describe various hedge fund strategies, including long/short equity, dedicated short, distressed securities, merger arbitrage, convertible arbitrage, fixed income arbitrage, emerging markets, global macro, and managed futures, and identify the risks faced by hedge funds.

* Describe characteristics of mutual fund and hedge fund performance and explain the effect of measurement biases on performance measurement.

After reviewing the notes, you will be able to apply what you learned with practice questions.

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