P2.T8. Investment Management

Practice questions for investment management and risk management

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  1. Suzanne Evans

    Question 4: Hedge funds

    Question: According to Jaeger, what is the essential characteristic of a fund of a hedge fund (i.e., as an advantage over a single hedge fund and which distinguishes among funds of hedge funds)? A. Diversification B. Absolute returns C. Operational due diligence D. Less total cost Answer: A Explanation: In exchange for an additional layer of fees, a fund of hedge fund "spreads the...
    Question: According to Jaeger, what is the essential characteristic of a fund of a hedge fund (i.e., as an advantage over a single hedge fund and which distinguishes among funds of hedge funds)? A. Diversification B. Absolute returns C. Operational due diligence D. Less total cost Answer: A Explanation: In exchange for an additional layer of fees, a fund of hedge fund "spreads the...
    Question: According to Jaeger, what is the essential characteristic of a fund of a hedge fund (i.e., as an advantage over a single hedge fund and which distinguishes among funds of hedge funds)? A. Diversification B. Absolute returns C. Operational due diligence D. Less total cost ...
    Question: According to Jaeger, what is the essential characteristic of a fund of a hedge fund (i.e., as an advantage over a single hedge fund and which distinguishes among funds of hedge funds)? ...
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  2. Suzanne Evans

    Question 3: IRC

    Question: Which is NOT an objective defined by IRC in seeking hedge fund disclosures: A. Risk monitoring B. Risk aggregation C. Expense ratio transparency D. Strategy drift monitoring Answer: C Explanation: The IRC defined three disclosure objectives: (1) Risk monitoring, (2) Risk aggregation; i.e., so investors can properly aggregate their risks, and (3) strategy drift monitoring;...
    Question: Which is NOT an objective defined by IRC in seeking hedge fund disclosures: A. Risk monitoring B. Risk aggregation C. Expense ratio transparency D. Strategy drift monitoring Answer: C Explanation: The IRC defined three disclosure objectives: (1) Risk monitoring, (2) Risk aggregation; i.e., so investors can properly aggregate their risks, and (3) strategy drift monitoring;...
    Question: Which is NOT an objective defined by IRC in seeking hedge fund disclosures: A. Risk monitoring B. Risk aggregation C. Expense ratio transparency D. Strategy drift monitoring Answer: C Explanation: The IRC defined three disclosure objectives: (1) Risk monitoring, (2) Risk...
    Question: Which is NOT an objective defined by IRC in seeking hedge fund disclosures: A. Risk monitoring B. Risk aggregation C. Expense ratio transparency D. Strategy drift monitoring ...
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  3. Suzanne Evans

    Question 2: Generic ABS factor

    Question: According to Fung and Hsieh, most fixed income hedge funds are exposed to which generic ABS factor: A. an increase in the riskless rate (Treasury rate) B. a decrease in the riskless rate C. a decrease in credit spread D. an increase in credit spread Answer: D Explanation: For most of the five reviewed styles, the strongest explanatory power (i.e., the highest R2) related...
    Question: According to Fung and Hsieh, most fixed income hedge funds are exposed to which generic ABS factor: A. an increase in the riskless rate (Treasury rate) B. a decrease in the riskless rate C. a decrease in credit spread D. an increase in credit spread Answer: D Explanation: For most of the five reviewed styles, the strongest explanatory power (i.e., the highest R2) related...
    Question: According to Fung and Hsieh, most fixed income hedge funds are exposed to which generic ABS factor: A. an increase in the riskless rate (Treasury rate) B. a decrease in the riskless rate C. a decrease in credit spread D. an increase in credit spread Answer: D Explanation:...
    Question: According to Fung and Hsieh, most fixed income hedge funds are exposed to which generic ABS factor: A. an increase in the riskless rate (Treasury rate) B. a decrease in the riskless...
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  4. Suzanne Evans

    Question 1: Trent following strategy

    Question: Fung and Hsieh show that a "trend-following strategy" can be implemented with: A. a short position in a lookback straddle B. a long position in a lookback straddle C. a long position in a strangle D. a short position in a butterfly Answer: B Explanation: A lookback straddle is a pair of structured options. The lookback call option gives the holder the right (the option)...
    Question: Fung and Hsieh show that a "trend-following strategy" can be implemented with: A. a short position in a lookback straddle B. a long position in a lookback straddle C. a long position in a strangle D. a short position in a butterfly Answer: B Explanation: A lookback straddle is a pair of structured options. The lookback call option gives the holder the right (the option)...
    Question: Fung and Hsieh show that a "trend-following strategy" can be implemented with: A. a short position in a lookback straddle B. a long position in a lookback straddle C. a long position in a strangle D. a short position in a butterfly Answer: B Explanation: A lookback straddle...
    Question: Fung and Hsieh show that a "trend-following strategy" can be implemented with: A. a short position in a lookback straddle B. a long position in a lookback straddle C. a long...
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