Question #48

Reading: Reading 34 Hedge Fund Strategies

PDF File: Reading 34 Hedge Fund Strategies.pdf

Page: 20

Status: Correct

Correct Answer: A

Part of Context Group: Q48-49 First in Group
Shared Context
- Copernicus's investment strategy would most accurately be classified as: A) specialist. B) opportunistic. C) event driven.
Question
Which claim made by APM is least accurate ?
Answer Choices:
A. Claim 3
B. Claim 2
C. Claim 1
Explanation
Claim 1 is inaccurate: global macro funds are likely to underperform in low-volatility markets. Claim 2 is accurate; global macro funds also perform worse in mean-reverting markets. Claim 3 is plausible; global macro funds generally apply significant leverage to boost returns (often between 600%–700% of capital).
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