Market neutral-arbitrage funds attempt to hedge market risk by taking offsetting positions, often in different securities of the same issuer.

Question

Quizplus · Accepted Answer

Market neutral-arbitrage funds aim to eliminate market risk by simultaneously taking long and short positions in the securities of the same issuer or in related securities. This way, they try to generate profits from the mispricing of securities, rather than from the overall direction of the market.

Market Neutral-Arbitrage Funds Attempt to Hedge Market Risk by Taking