What is the primary trading cost for a hedge fund that manages a large fund (e.g., $1 billion in total equity capital).O A. CommissionsB. Bid-ask spreads.O. The slope of the market impact (or price impact) curve.O D. Large hedge funds benefit from economies of scale when it comes to trading costs, in which case none of the above are important.

A hedge fund is a type of investment fund that pools capital from accredited investors or…

What is the primary trading cost for a hedge fund that manages a large fund (e.g., $1 billion in total equity capital). O A. Commissions O B. Bid-ask spreads. O C. The slope of the market impact (or price impact) curve. O D. Large hedge funds benefit from economies of scale when it comes to trading costs, in which case none of the above are important.

What is the primary trading cost for a hedge fund that manages a large fund (e.g., $1 billion in total equity capital). O A. Commissions O B. Bid-ask spreads. O C. The slope of the market impact (or price impact) curve. O D. Large hedge funds benefit from economies of scale when it comes to trading costs, in which case none of the above are important.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The market risk premium is defined as __________. A. the difference between the return on an index fund and the return on Treasury bills B. the difference between the return on a small firm mutual fund and the return on the Standard and Poor's 500 index C. the difference between the return on the risky asset with the lowest returns and there turn on Treasury bills D. the difference between the return on the highest yielding asset and the lowest yielding asset
-Give an example of a hidden capital gain. -List the reasonns why mutual funds redeem shares -Is a negative Sharpe ratio good or bad? EXPLAIN -If a mutual fund earned 12 % when the market earned only 9 % does this prove the manager outperform the market? -if diversification is desired, would you seek investments with high correlation?
How can a mutual fund manager who follows a momentum trading strategy expect to earn above - average return 1. Provided the stock price has been decreasing below the mean reversion point and other investors follow a mean reversion strategy the fund manager is likely to earn an above average return 2. If the fund manager follows a momentum strategy and buys a stock as the price is increasing while other investors follow a mean reversion strategy, then it is likely the stock price will continue to rise 3. Provided the stock price have been rising above the mean reversion point and other investors follow a mean reversion strategy, the fund manager is likely to earn an above average return 4. If the fund manager follows a momentum strategy and buys a stock as the price is increasing and other investors also follow a momentum strategy, then it is likely the stock price will continue to rise
assuming that the stock market is efficient which of the following statements is correct? A. investors can make money through investing in hot IPO‘s. B. skilled mutual fund managers can outperform the market by selecting undervalued stocks. C. investing in individual stocks is always more rewarding than in diversified portfolios. D. The best investment vehicle is market index funds.
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. Both the extra layer of fees and the higher liquidity offered.b. No reason; funds of funds earn returns that are equal to those of individual hedge funds.c. The extra layer of fees only.
Which statement below is incorrect? Select one: A. The four "V" features of big data include volume, variety, value, and velocity. B. When the price of the underlying asset increases, the call option price will increase while the put option price will decrease. C. The Fama-French High-Minus-Low portfolio (HML) is a strategy that attempts to buy stocks with high prices and sell stocks with low prices. D. The passive mutual funds charge a lower administration fee than the active mutual funds.
Which of the following defines a hedge fund the most? 1. A collective investment model based on issuing a fixed number of shares which are not redeemable from the fund. 2. A negotiable security that represents securities of a foreign company and allows that company's shares to trade in the U.S. financial markets. 3. A diversified portfolio that typically does not limit the number of shares it can offer, and they are bought and sold on demand. 4. A type of investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio construction and risk-management techniques to improve performance.
Which of the following is correct? Transactions within the spot market can be used to mitigate and hedge risk. In an efficient market, it is not possible that a stock of the firm has a price equal to its intrinsic value. Index funds are funds that reflect the performance of a specific index An example of an indirect transfer of capital through investment banks is when an investor buys a unit of a fund from a bank that is invested in various financial assets such as bonds and stocks of other companies.
Which mutual fund tends to be invested in companies with relatively low P/E ratios and good growth potential to its peers? A : Growth and income fund B : Value fund C : Growth fund D : Balanced fund
An exchange fund with an objective of investing in stocks considered to be a need versus want by the market is a(n) ______ Balanced Fund Growth Fund Value Fund Index Fund An Exchange Traded fund with an objective of both growth and income is a(n) An open-end investment company Value Fund Balanced Fund
Which flow of funds indicator is considered bearish for equities? A. Higher than Average cash balances in mutual funds B. A Large increase in the number of IPOs C. An upturn inmargin debt but one that is still below the long-term average
There are different proxies used for investment sentiments such as ; Retail Investor Trades Mutual Fund Flows Trading Volume Dividend Premium Closed-End Fund Discount Option Implied Volatility IPO First-Day Returns and IPO Volume. Question; What are the advantages and disadvantages of the above 7 proxies

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