| LOS l, (Part 1): Discuss the performance of hedge funds and the biases present in hedge fund performance measurement.
Q1. Hedge funds are generally not required to publicly disclose their performance, however, some managers choose to make performance information available to the public. This information is then included in hedge fund indexes and some conclusions about the performance of hedge funds can be drawn. Which of the following statements regarding hedge fund performance is least accurate?
A) When measured by standard deviation, hedge funds are less risky than traditional equity investments.
B) In recent years, the Sharpe ratio for hedge funds has been comparable to that of fixed income investments.
C) The reported volatility of hedge fund returns may be higher than the actual volatility of returns.
Q2. Hedge fund performance data suffers from serious biases that can be attributed to the fact that:
A) there is not a reliable index that tracks hedge fund performance.
B) hedge funds as an asset class have not been in existence long enough to have meaningful performance data.
C) fund managers tend to submit only favorable performance data.
Q3. The fee structure of a hedge fund may lead to biases in performance data because:
A) hedge fund managers are not required to disclose information regarding fee structures.
B) hedge fund managers charge higher fees than managers of traditional funds.
C) fund managers have incentives to take big risks if past performance has been poor.
Q4. Which of the following statements regarding hedge fund performance is FALSE?
A) Hedge funds have demonstrated a lower risk profile than traditional equity investments.
B) The Sharpe ratio for hedge funds has been consistently higher than for most traditional equity investments.
C) Hedge funds have historically underperformed the S& 500.
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发表于 2009-2-28 17:51
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