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Test your basic knowledge |
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. No transparency - - non-investible - lack of liquidity - difficult to replicate - report time lag
Discretionary Global Macro
advantage of FoHF
non-investible FoHF
Theta
2. Use fundamental first then technical. Technical isn't used for idea generation but for execution of strategy.
5 reasons to hedge liquid risk factors
Systematic Global Macro
Discretionary Global Macro
disadvantage of FoHF
3. Definability - Commonality - Tradability
Beta Overlay Econ Risk Factor
advantage of FoHF
HF due deligence
FoHF Due diligence
4. Idea generation - optimal idea expression - sizing the position - execution - managing risk
Systematic Global Macro
HF due deligence
Long/Short Strategy
disadvantage of FoHF
5. Carry Trade - Yeild Curve relative value trades - Purchasing Power Parity - Valuation models - option pricing models
Theta
Beta Overlay Econ Risk Factor
Global Macro Models
Chi
6. Specific nature of security - use of leverage - valuation method - manager skill
HF due deligence
Global Macro Models
Primary Ways FoHF add value
5 reasons to hedge liquid risk factors
7. Transparent - verifiable - accountable - investible - reasonable - representative
non-investible FoHF
desirable properties of FoHF investible indices
disadvantage of FoHF
advantage of FoHF
8. Transparent - verifiable - accountable - investible - reasonable - representative
non-investible FoHF
non-investible FoHF
desirable properties of FoHF investible indices
Theta
9. Background - product info - performance - asset allocation - manager selection - portfolio construction - risk management - admin/op - client reporting - compliance/legal
Beta Overlay Econ Risk Factor
Gamma
FoHF Due diligence
Primary Ways FoHF add value
10. 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
HF due deligence
Primary Ways FoHF add value
Rho
HF due deligence
11. Measures sensitivity to changes in currency value
5 reasons to hedge liquid risk factors
Systematic Global Macro
Chi
FoHF Due diligence
12. Background - product info - performance - asset allocation - manager selection - portfolio construction - risk management - admin/op - client reporting - compliance/legal
FoHF Due diligence
Beta Overlay Econ Risk Factor
investible FoHF
Chi
13. Idea generation - optimal idea expression - sizing the position - execution - managing risk
Long/Short Strategy
Systematic Global Macro
desirable properties of FoHF investible indices
Systematic Global Macro
14. Access bias: imposing strict selection criteria on track records - transparency - valuation - AUM
Primary Ways FoHF add value
investible FoHF
upsilon
Discretionary Global Macro
15. Measures sensitivity to changes in currency value
desirable properties of FoHF investible indices
FoHF Due diligence
Chi
desirable properties of FoHF investible indices
16. Diversification - econ of scale - info adv - liquidity - manager access - lower negotiated fees - lower reg hurdle - currency hedging - pro management
advantage of FoHF
5 reasons to hedge liquid risk factors
Primary Ways FoHF add value
Beta Overlay Econ Risk Factor
17. 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
5 reasons to hedge liquid risk factors
investible FoHF
Theta
Chi
18. Credit spread
Long/Short Strategy
Theta
5 reasons to hedge liquid risk factors
Omicron
19. Diversification - econ of scale - info adv - liquidity - manager access - lower negotiated fees - lower reg hurdle - currency hedging - pro management
HF due deligence
phi
Primary Ways FoHF add value
advantage of FoHF
20. Measures the convertible's price sensitivity relative to changes in interest rates
Beta Overlay Econ Risk Factor
Rho
Theta
disadvantage of FoHF
21. Underlying stock dividend yield
advantage of FoHF
Chi
phi
Long/Short Strategy
22. Definability - Commonality - Tradability
Beta Overlay Econ Risk Factor
advantage of FoHF
disadvantage of FoHF
Discretionary Global Macro
23. Measures the convertible's price sensitivity relative to changes in interest rates
Beta Overlay Econ Risk Factor
desirable properties of FoHF investible indices
Beta Overlay Requirement
Rho
24. 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
Gamma
5 reasons to hedge liquid risk factors
Beta Overlay Econ Risk Factor
upsilon
25. Changes in time
Theta
FoHF Due diligence
Chi
Omicron
26. Always positive - highest for at the money - measures convertible's price sensitivity relative to changes in stock volatility
Omicron
Vega
Beta Overlay Requirement
Systematic Global Macro
27. Use fundamental first then technical. Technical isn't used for idea generation but for execution of strategy.
Discretionary Global Macro
Global Macro Models
Rho
Omicron
28. 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
HF due deligence
Primary Ways FoHF add value
Chi
Discretionary Global Macro
29. 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
Long/Short Strategy
Beta Overlay Requirement
Vega
Primary Ways FoHF add value
30. Underlying stock dividend yield
phi
FoHF Due diligence
Rho
investible FoHF
31. Specific nature of security - use of leverage - valuation method - manager skill
Rho
HF due deligence
Beta Overlay Econ Risk Factor
Chi
32. Measures the convexity of the convertible-stock price relationship
disadvantage of FoHF
HF due deligence
Systematic Global Macro
Gamma
33. Carry Trade - Yeild Curve relative value trades - Purchasing Power Parity - Valuation models - option pricing models
Beta Overlay Econ Risk Factor
Global Macro Models
Omicron
Vega
34. Changes in time
5 reasons to hedge liquid risk factors
non-investible FoHF
Omicron
Theta
35. Always positive - highest for at the money - measures convertible's price sensitivity relative to changes in stock volatility
Theta
Vega
Gamma
Beta Overlay Econ Risk Factor
36. Access bias: imposing strict selection criteria on track records - transparency - valuation - AUM
Beta Overlay Requirement
advantage of FoHF
HF due deligence
investible FoHF
37. No transparency - - non-investible - lack of liquidity - difficult to replicate - report time lag
upsilon
HF due deligence
non-investible FoHF
HF due deligence
38. Recovery rate
Global Macro Models
Chi
upsilon
Rho
39. Measures the convexity of the convertible-stock price relationship
desirable properties of FoHF investible indices
Gamma
Discretionary Global Macro
investible FoHF
40. Use technical for both idea generation and execution of strategy.
Systematic Global Macro
disadvantage of FoHF
5 reasons to hedge liquid risk factors
desirable properties of FoHF investible indices
41. Recovery rate
disadvantage of FoHF
upsilon
FoHF Due diligence
Primary Ways FoHF add value
42. Credit spread
Primary Ways FoHF add value
disadvantage of FoHF
Global Macro Models
Omicron
43. Double fee - performance fee - taxes - limited tranparency - lack of control
Rho
Beta Overlay Requirement
disadvantage of FoHF
5 reasons to hedge liquid risk factors
44. 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
desirable properties of FoHF investible indices
Rho
Systematic Global Macro
45. Use technical for both idea generation and execution of strategy.
Theta
upsilon
disadvantage of FoHF
Systematic Global Macro
46. Double fee - performance fee - taxes - limited tranparency - lack of control
disadvantage of FoHF
5 reasons to hedge liquid risk factors
Vega
Beta Overlay Econ Risk Factor