Question #6
Reading: Reading 34 Hedge Fund Strategies
PDF File: Reading 34 Hedge Fund Strategies.pdf
Page: 2
Status: Correct
Correct Answer: B
Question
The failure of a merger to occur is a risk of which of the following hedge fund strategies?
Answer Choices:
A. Opportunistic
B. Equity related
C. Event driven
Explanation
Since the success of an event-driven strategy is dependent upon the event occurring, the
failure of a merger to occur is a risk of that type of strategy. Equity-related strategies focus
on stocks, and hence the primary source of risk is equity risk. Opportunistic strategies
employ a top-down approach, often consider multiple asset classes, and vary with market
conditions.