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LOS r: Explain the purpose and special characteristics of fund-of-funds hedge funds.
Q1. William Jones, CFA, has a client who wants to invest in a hedge fund. Jones might recommend a fund of funds instead of a single fund for all of the following reasons EXCEPT a fund of funds:
A) would be more liquid.
B) may serve as a better indicator of aggregate performance of hedge funds.
C) would have a lower correlation with equity markets.
Q2. Style drift and survivorship bias are often mentioned in the analysis of hedge fund performance. Which of the following statements is most accurate? Fund of funds can serve as better indicators of aggregate hedge fund performance than hedge fund indices because they tend to have a lower level of:
A) both survivorship bias and style drift.
B) survivorship bias only.
C) style drift only.
Q3. With respect to hedge fund investing, the net return to an investor in a fund of funds would be lower than that earned from an individual hedge fund because of:
A) no reason; fund of funds earn returns that are equal to those of individual hedge funds.
B) the extra layer of fees only.
C) both the extra layer of fees and the higher liquidity offered. | 
发表于 2009-3-11 10:11
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