Asked by Natalie Zavala on May 28, 2024
Verified
Which of the following typically employ significant amounts of leverage?
I. Hedge funds
II. REITs
III. Money market funds
IV. Equity mutual funds
A) I and II only
B) II and III only
C) III and IV only
D) I, II, and III only
Leverage
The use of borrowed funds to increase the potential return of an investment, also amplifying the potential risk of loss.
Equity Mutual Funds
Investment funds that pool money from many investors to purchase a portfolio of stocks, aiming to provide returns through dividends and capital gains.
- Distinguish between diverse private investment pools like hedge funds, focusing on their unique features.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
A
Explanation :
Hedge funds and REITs typically employ significant amounts of leverage in their investment strategies. Money market funds and equity mutual funds generally do not use as much leverage.
Learning Objectives
- Distinguish between diverse private investment pools like hedge funds, focusing on their unique features.