Asked by Mahammed Bindawood on Jul 09, 2024
Verified
A ________ is a private investment pool open only to wealthy or institutional investors that is exempt from SEC regulation and can therefore pursue more speculative policies than mutual funds.
A) commingled pool
B) unit trust
C) hedge fund
D) money market fund
Hedge Fund
A private investment fund that employs a variety of strategies to earn active return, or alpha, for their investors, often involving leverage, derivatives, and short selling.
SEC Regulation
A set of rules and laws enacted by the U.S. Securities and Exchange Commission to regulate securities markets and protect investors.
Institutional Investors
Institutional investors are large organizations, like pension funds and mutual funds, that invest substantial amounts of money in securities and real estate.
- Differentiate between various private investment pools such as hedge funds and their characteristics.
Verified Answer
KA
Katie AndersonJul 14, 2024
Final Answer :
C
Explanation :
A hedge fund is a private investment pool that is exempt from SEC regulation and can pursue more speculative policies than mutual funds. Commingled pools and unit trusts are not necessarily only open to wealthy or institutional investors, and money market funds are regulated by the SEC and have restrictions on their investment policies.
Learning Objectives
- Differentiate between various private investment pools such as hedge funds and their characteristics.