A fund which invests in companies that are in or close to bankruptcy is called:

Question

Quizplus · Accepted Answer

Distressed funds can invest in any type of distressed security, including common stock, preferred stock, or debt. Companies with distressed securities are usually in bankruptcy, or close to bankruptcy, and in need of legal action. The fund manager thinks there will be some value after the bankruptcy and after creditors have been paid, and that the market is not valuing the security accurately.

A Fund Which Invests in Companies That Are in or Close