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Hedge Funds
Start Test
Study First
Subjects
:
business-skills
,
industries
Instructions:
Answer 46 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Specific nature of security - use of leverage - valuation method - manager skill
FoHF Due diligence
FoHF Due diligence
Omicron
HF due deligence
2. Definability - Commonality - Tradability
Beta Overlay Econ Risk Factor
advantage of FoHF
advantage of FoHF
Primary Ways FoHF add value
3. Background - product info - performance - asset allocation - manager selection - portfolio construction - risk management - admin/op - client reporting - compliance/legal
Global Macro Models
non-investible FoHF
Chi
FoHF Due diligence
4. Measures the convertible's price sensitivity relative to changes in interest rates
Beta Overlay Requirement
Vega
HF due deligence
Rho
5. Expected return of factor is negative - Benefit exceeds cost of positive return - Preexisting exposure - Risk factor is a by product of return and create great variation in return - Significant portion of variability can be explained by variation in
Beta Overlay Requirement
FoHF Due diligence
Systematic Global Macro
Gamma
6. No transparency - - non-investible - lack of liquidity - difficult to replicate - report time lag
FoHF Due diligence
advantage of FoHF
non-investible FoHF
Long/Short Strategy
7. Idea generation - optimal idea expression - sizing the position - execution - managing risk
disadvantage of FoHF
upsilon
Long/Short Strategy
5 reasons to hedge liquid risk factors
8. Measures the convertible's price sensitivity relative to changes in interest rates
HF due deligence
Rho
upsilon
Global Macro Models
9. Tactical: skillful asset allocation based on changing market - Strategic: provide long term direction - Manager Selection: primary source - decide Which manager to use how much to allocation
Chi
advantage of FoHF
Theta
Primary Ways FoHF add value
10. No transparency - - non-investible - lack of liquidity - difficult to replicate - report time lag
advantage of FoHF
non-investible FoHF
Beta Overlay Requirement
Vega
11. Always positive - highest for at the money - measures convertible's price sensitivity relative to changes in stock volatility
Vega
FoHF Due diligence
Discretionary Global Macro
Global Macro Models
12. Measures sensitivity to changes in currency value
phi
HF due deligence
Chi
Beta Overlay Econ Risk Factor
13. Expected return of factor is negative - Benefit exceeds cost of positive return - Preexisting exposure - Risk factor is a by product of return and create great variation in return - Significant portion of variability can be explained by variation in
Beta Overlay Requirement
Vega
Discretionary Global Macro
Primary Ways FoHF add value
14. Factors have futures and forwards readily available thus easiest to hedge - a significant source of risk - great volatility in risk over time - common among investor portfolios - investor chose investment based on alpha thus removing beta should be o
Omicron
5 reasons to hedge liquid risk factors
Discretionary Global Macro
Global Macro Models
15. Tactical: skillful asset allocation based on changing market - Strategic: provide long term direction - Manager Selection: primary source - decide Which manager to use how much to allocation
phi
Primary Ways FoHF add value
disadvantage of FoHF
FoHF Due diligence
16. Transparent - verifiable - accountable - investible - reasonable - representative
Vega
Beta Overlay Requirement
Beta Overlay Econ Risk Factor
desirable properties of FoHF investible indices
17. Recovery rate
Chi
upsilon
Systematic Global Macro
Omicron
18. Use fundamental first then technical. Technical isn't used for idea generation but for execution of strategy.
Primary Ways FoHF add value
Discretionary Global Macro
non-investible FoHF
investible FoHF
19. Specific nature of security - use of leverage - valuation method - manager skill
Systematic Global Macro
HF due deligence
Rho
Primary Ways FoHF add value
20. Diversification - econ of scale - info adv - liquidity - manager access - lower negotiated fees - lower reg hurdle - currency hedging - pro management
investible FoHF
Beta Overlay Econ Risk Factor
advantage of FoHF
Beta Overlay Requirement
21. Measures the convexity of the convertible-stock price relationship
Beta Overlay Econ Risk Factor
Gamma
advantage of FoHF
Discretionary Global Macro
22. Definability - Commonality - Tradability
advantage of FoHF
investible FoHF
Beta Overlay Econ Risk Factor
phi
23. Background - product info - performance - asset allocation - manager selection - portfolio construction - risk management - admin/op - client reporting - compliance/legal
desirable properties of FoHF investible indices
FoHF Due diligence
Rho
Long/Short Strategy
24. Use fundamental first then technical. Technical isn't used for idea generation but for execution of strategy.
Discretionary Global Macro
FoHF Due diligence
advantage of FoHF
phi
25. Underlying stock dividend yield
phi
Long/Short Strategy
disadvantage of FoHF
Primary Ways FoHF add value
26. Underlying stock dividend yield
Discretionary Global Macro
Theta
upsilon
phi
27. Recovery rate
Long/Short Strategy
upsilon
Chi
FoHF Due diligence
28. Access bias: imposing strict selection criteria on track records - transparency - valuation - AUM
Systematic Global Macro
Discretionary Global Macro
Theta
investible FoHF
29. Measures the convexity of the convertible-stock price relationship
Gamma
HF due deligence
Theta
Primary Ways FoHF add value
30. Diversification - econ of scale - info adv - liquidity - manager access - lower negotiated fees - lower reg hurdle - currency hedging - pro management
upsilon
advantage of FoHF
FoHF Due diligence
Gamma
31. Carry Trade - Yeild Curve relative value trades - Purchasing Power Parity - Valuation models - option pricing models
Chi
Global Macro Models
Beta Overlay Econ Risk Factor
upsilon
32. Changes in time
Rho
Vega
Theta
upsilon
33. Use technical for both idea generation and execution of strategy.
phi
Systematic Global Macro
Theta
Gamma
34. Always positive - highest for at the money - measures convertible's price sensitivity relative to changes in stock volatility
investible FoHF
Omicron
Systematic Global Macro
Vega
35. Double fee - performance fee - taxes - limited tranparency - lack of control
phi
disadvantage of FoHF
Primary Ways FoHF add value
Chi
36. Idea generation - optimal idea expression - sizing the position - execution - managing risk
investible FoHF
Long/Short Strategy
Gamma
Global Macro Models
37. Access bias: imposing strict selection criteria on track records - transparency - valuation - AUM
Beta Overlay Requirement
non-investible FoHF
Long/Short Strategy
investible FoHF
38. Carry Trade - Yeild Curve relative value trades - Purchasing Power Parity - Valuation models - option pricing models
Global Macro Models
non-investible FoHF
Beta Overlay Requirement
Omicron
39. Credit spread
Omicron
Theta
Discretionary Global Macro
Vega
40. Transparent - verifiable - accountable - investible - reasonable - representative
HF due deligence
desirable properties of FoHF investible indices
advantage of FoHF
phi
41. Use technical for both idea generation and execution of strategy.
Systematic Global Macro
Vega
5 reasons to hedge liquid risk factors
Discretionary Global Macro
42. Factors have futures and forwards readily available thus easiest to hedge - a significant source of risk - great volatility in risk over time - common among investor portfolios - investor chose investment based on alpha thus removing beta should be o
Primary Ways FoHF add value
investible FoHF
5 reasons to hedge liquid risk factors
Global Macro Models
43. Double fee - performance fee - taxes - limited tranparency - lack of control
desirable properties of FoHF investible indices
Vega
Global Macro Models
disadvantage of FoHF
44. Changes in time
Theta
Primary Ways FoHF add value
advantage of FoHF
desirable properties of FoHF investible indices
45. Credit spread
Beta Overlay Econ Risk Factor
Global Macro Models
Omicron
Gamma
46. Measures sensitivity to changes in currency value
Vega
Discretionary Global Macro
Primary Ways FoHF add value
Chi
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