Quiz Ch 20 – Hedge Fund Arbitrage Opportunities
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
Which transaction could result in positive arbitrage gains for a hedge fund, given a positive basis and minimal borrowing costs?
Which transaction could result in positive arbitrage gains for a hedge fund, given a positive basis and minimal borrowing costs?
How much in assets under management did hedge funds have around 2019?
What percentage of investment profits beyond a predetermined benchmark index does a typical hedge fund incentive bonus usually represent?
How can the hedge fund manager’s incentive fee, which is 20% of profits beyond the risk-free benchmark, be likened to receiving call options in terms of quantity and exercise price?
What is the term used to describe the practice of hedge funds including past returns of only successful funds to attract new clients?
As per Agarwal, Daniel, and Naik’s 2011 study, hedge funds commonly exhibit varied average returns in which month compared to their average returns in other months?
What approach could a hedge fund adopt to capitalize on positive alpha in a long equity position?
How are hedge funds commonly structured?
How is hedging a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per quarter using 3-month S&P 500 future contracts ($250 multiplier) characterized?
Which strategy represents a neutral pure play?