A hedge fund pursuing a ______ strategy is betting one sector of the economy will outperform other sectors.

Question

Quizplus · Accepted Answer

A directional strategy involves making bets on the future performance of certain sectors or asset classes. This strategy is focused on identifying trends and making investments accordingly. In contrast, a non-directional strategy seeks to make gains regardless of market trends and may involve hedging or options trading. Stock or bond strategies are more specific to the type of assets being traded, while arbitrage or speculation strategies involve exploiting differences in pricing or making high-risk, high-reward bets.

A Hedge Fund Pursuing a ______ Strategy Is Betting One