Which of the following is correct?
A)Hedge funds often sell stock they don't even own.
B)Hedge funds maintain secrecy about their holdings, trading, and strategies.
C)Hedge funds are limited to sophisticated investors.
D)All of these statements are correct.

Question

Quizplus · Accepted Answer

Option A is correct because hedge funds often engage in a trading strategy called short selling, where they sell stocks they do not own with the hope of buying them back later at a lower price.
Option B is correct because hedge funds are not required to publicly disclose their holdings, trading strategies or performance, unlike mutual funds or other types of investment companies.
Option C is correct because hedge funds are typically only available to accredited or sophisticated investors, who meet certain minimum income or net worth requirements, and often require a significant minimum investment amount.

Which of the Following Is Correct