Asked by Araceli ArredondoLona on Jul 09, 2024
Verified
A hedge fund pursuing a ______ strategy is betting one sector of the economy will outperform other sectors.
A) directional
B) nondirectional
C) stock or bond
D) arbitrage or speculation
E) None of the options are correct.
Directional Strategy
Speculation that one sector or another will outperform other sectors of the market.
Economy Sectors
Divisions within an economy, categorized by their primary business activities, such as technology, healthcare, and finance.
- Distinguish and outline the differences among various hedge fund strategies, including market neutral, directional, and arbitrage techniques.
Verified Answer
LM
La Mont Hurt Jr.Jul 16, 2024
Final Answer :
A
Explanation :
A directional strategy involves making investments based on the anticipated direction of the broad market or a specific sector of the market. Betting one sector will outperform others is a classic example of a directional strategy.
Learning Objectives
- Distinguish and outline the differences among various hedge fund strategies, including market neutral, directional, and arbitrage techniques.