Asked by Nguyen Hien Minh Quan on Jul 26, 2024
Verified
Sadka (2010) shows that exposure to unexpected declines in ________ is an important determinant of average hedge fund returns, and that the spreads in average returns across funds with the highest and lowest ________ may be as much as 6% annually.
A) market risk; systematic risk
B) market liquidity; liquidity risk
C) unsystematic risk; unique risk
D) default risk; default risk
Market Liquidity
The extent to which a market allows assets to be bought and sold quickly without affecting the asset's price significantly.
Liquidity Risk
The risk of being unable to quickly convert assets into cash without significant loss in value, affecting a company's or individual's ability to meet short-term obligations.
Hedge Fund Returns
The earnings generated from investments in a hedge fund, which is a pooled investment fund that employs different strategies to earn active returns for its investors.
- Investigate the effect of large-scale economic variables and the state of the market on strategies employed by hedge funds.
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Learning Objectives
- Investigate the effect of large-scale economic variables and the state of the market on strategies employed by hedge funds.
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