For which of the following strategies do fund managers try to identify mispricing relationships between securities that, in theory, should not exist?
A)market neutral
B)arbitrage
C)distressed securities
D)macro
E)market timing

Question

Quizplus · Accepted Answer

Fund managers try to identify mispricing relationships between securities that, in theory, should not exist in arbitrage strategy. This strategy involves taking advantage of price inefficiencies that temporarily exist in different markets or securities. The fund manager identifies mispricings and then simultaneously buys and sells related securities to exploit these inefficiencies and generate profits.

For Which of the Following Strategies Do Fund Managers Try