A portfolio manager who is trying to generate alpha could use

Question

Quizplus · Accepted Answer

Hedge funds are known for their ability to generate alpha by actively managing investments and taking advantage of market inefficiencies. They often use a variety of investment strategies such as leverage, derivatives, and short selling to generate returns that are uncorrelated with the broader market. While there are risks associated with investing in hedge funds, they can be a useful tool for portfolio managers who are trying to generate alpha. Mutual funds, insured asset allocation, and ETFs tend to be more passive investment vehicles that may not be as effective at generating alpha.

A Portfolio Manager Who Is Trying to Generate Alpha Could