CMSA (HEDGE FUND FUNDAMENTALS) EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS VERIFIED GRADED A++ LATEST UPDATE
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Module
CMSA
Institution
CMSA
What are three characteristics of hedge funds?
They are
1. Actively Managed
2. Unregulated
3. Limited Investors
Why are Hedge Funds actively managed?
1. They aim for profitability regardless of market circumstances
2. Collect management and performance fees
Why are Hedge Funds Unregulated?
...
1. They aim for profitability regardless of market circumstances
2. Collect management and performance fees
Why are Hedge Funds Unregulated?
They can't market themselves generally only to accredited investors
What limits are there for Hedge Funds finding investors?
1. Can only find accredited investors
2. Can only target a certain number of institutional investors
Hedge Fund Managers usually have __ at risk
, their own capital
What are the different types of Features in hedge funds?
1. They are defined by strategy (Long/Short Positions)
2. They are often largely leveraged
3. Require investors to lock up capital in the funds
What are the differences between hedge funds and mutual funds?
Hedge Funds
1. Minimal Regulation
2. Paid in a performance fee
3. Uses high leverage
4.Seeking high returns
5. Can be long or short
6. Low correlation with traditional markets
Mutual Funds
1. Extensive regulation
2. Paid as a percentage of AUM
3. Low to no leverage
4. Objective is to outperform a benchmark
5. Usually holds long positions
6. There are high correlation with traditional markets
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