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 exploiting relative mispricing within a market while being hedged to avoid taking a stance on the direction of the broad market. It seeks to isolate the performance of the targeted assets from general market movements. Therefore, the other options, such as directional, non-directional, arbitrage, or speculation, do not fit the explanation of a market neutral strategy.

A Hedge Fund Pursuing a ______ Strategy Is Trying to Exploit