Questions
Business Finance Chapter 02 Practice
Single choice
Which of the following statements is CORRECT?
Options
A.Hedge funds are legal in Europe and Asia, but they are not permitted to operate in the United States.
B.Hedge funds are legal in the United States, but they are not permitted to operate in Europe or Asia.
C.Hedge funds have more in common with investment banks than with any other type of financial institution.
D.Hedge funds have more in common with commercial banks than with any other type of financial institution.
E.Hedge funds are not as highly regulated as most other types of financial institutions. The justification for this light regulation is that only "sophisticated" investors (i.e., those with high net worths and high incomes) are permitted to invest in these funds, and these investors supposedly can do any necessary "due diligence" on their own rather than have it done by the SEC or some other regulator.
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Step-by-Step Analysis
Question: Which of the following statements is CORRECT?
Option 1: 'Hedge funds are legal in Europe and Asia, but they are not permitted to operate in the United States.' This is inaccurate. Hedge funds operate in the United States as well as Europe and Asia, though regulatory environments and registration requirements differ by region. The claim that they are not permitted in the U.S. is incorrect.
Option 2: 'Hedge funds are legal in the United States, but they are not permitted to operate in Europe or Asia.' Similarly in......Login to view full explanationLog in for full answers
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Similar Questions
Part 1Hedge funds are similar to the Mutual funds. They allow small investors to diversify their portfolios and thus provides a hedge against risk. However, unlike a mutual fund, investors do not have to commit their money for long periods of time.Evaluate the statement above.Part 2 A. True. Hedge funds have a minimum investment requirement between $1000 and $5000, with the typical minimum investment being $1500. Furthermore, there is typically no penalty for withdrawing money from the fund. B. False. Although hedge funds typically have minimum investment requirement between $500 and $1000, they require that investors commit their money for long periods of time, often several years. C. True. Hedge funds have a minimum investment requirement between $500 and $1000, with the typical minimum investment being $500. Furthermore, shares in of a hedge fund can sold at anytime for any reason. D. False. Hedge funds have a minimum investment requirement between $100,000 and $20 million, with the typical minimum investment being $1 million. Furthermore, they usually require that investors commit their money for long periods of time, often several years.
Which of the following statements is CORRECT? 以下哪项陈述是正确的？
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