A hedge fund pursuing a ______ strategy is trying to exploit relative mispricing within a market but is hedged to avoid taking a stance on the direction of the broad market.

Question

Quizplus · Accepted Answer

A market neutral strategy involves taking long and short positions in securities to neutralize market risk, focusing on exploiting relative mispricing without betting on the market's direction. This is inherently nondirectional, as it does not depend on market movements to generate returns, fitting the description provided.

A Hedge Fund Pursuing a ______ Strategy Is Trying to Exploit