Performance evaluation of hedge funds is complicated by

A) liquidity premiums.
B) survivorship bias.
C) unreliable market valuations of infrequently-traded assets.
D) merger arbitrage.
E) All of the options are correct.

Performance Evaluation

The process of examining how well investments or portfolios have done over a period, comparing their returns against benchmarks or objectives.

Survivorship Bias

The analytical error of focusing only on entities that have "survived" a selection process, ignoring those that have failed.

Infrequently-Traded Assets

Assets that do not trade on a regular basis on the secondary market, making their valuation and liquidity different from frequently traded assets.