Asked by tehseen malik on May 28, 2024
Verified
______ are private partnerships of a small number of wealthy investors, are often subject to lock-up periods, and are allowed to pursue a wide range of investment activities.
A) Hedge funds
B) Closed-end funds
C) REITs
D) Mutual funds
Lock-Up Periods
A predetermined period following an initial public offering where major shareholders are prohibited from selling their shares.
Wealthy Investors
refers to individuals or entities that possess a significant amount of capital, often qualifying for exclusive investment opportunities and services.
Private Partnerships
A business organization owned by two or more individuals who share management and profits or losses.
- Recognize the regulatory elements and the organizational setups of hedge funds as compared to mutual funds.
- Understand the investment activities and strategies unique to hedge funds, including their use of leverage and lock-up periods.
Verified Answer
CI
Cornysia IslandJun 01, 2024
Final Answer :
A
Explanation :
Hedge funds are typically private partnerships of a small number of wealthy investors and often have lock-up periods (periods during which investors cannot withdraw their investments). They are also allowed to pursue a wide range of investment activities, including short selling, derivatives, and leverage. Closed-end funds, REITs, and mutual funds are different types of investment vehicles that have different structures and restrictions.
Learning Objectives
- Recognize the regulatory elements and the organizational setups of hedge funds as compared to mutual funds.
- Understand the investment activities and strategies unique to hedge funds, including their use of leverage and lock-up periods.