Hedge funds, as part of the market for corporate control, identifies a firm that is underperforming and then invests in it with the goal of improving that firm's performance.

Question

Quizplus · Accepted Answer

This is true. Hedge funds are known for their strategy of identifying underperforming firms and taking a stake in them with the intention of improving their performance and increasing shareholder value. This is one of the ways in which they participate in the market for corporate control.

Hedge Funds, as Part of the Market for Corporate Control