Asked by
Shannon Gatewood
on Nov 04, 2024Verified
Compared to mutual funds, hedge funds may require investors to _______________.
A) Cover transaction costs
B) Lock-up their investment for an extended period of time
C) Invest in a mixture of equities, debt, and international securities
D) Use specific trading protocols
Lock-up
A period post-initial public offering (IPO) during which shareholders are restricted from selling their shares.
Hedge Funds
Investment funds that employ diverse, and often more complex, strategies than traditional mutual funds, including the use of leverage, derivatives, and short selling to generate returns.
Mutual Funds
Investment programs funded by shareholders that trade in diversified holdings and are professionally managed.
- Distinguish the features and functioning tactics of hedge funds in comparison to mutual funds and Exchange-Traded Funds (ETFs).
Verified Answer
KC
Learning Objectives
- Distinguish the features and functioning tactics of hedge funds in comparison to mutual funds and Exchange-Traded Funds (ETFs).