17-47 Hedge funds are not susceptible to liquidity risk or a liquidity crisis.

Question

Quizplus · Accepted Answer

Hedge funds can be susceptible to liquidity risk or a liquidity crisis, particularly if they employ strategies that rely on short-term financing or have a significant portion of their holdings in illiquid assets. In times of market stress or economic uncertainty, investors may seek to withdraw their funds from the hedge fund, creating a liquidity mismatch and potentially leading to a liquidity crisis.

17-47 Hedge Funds Are Not Susceptible to Liquidity Risk or a Liquidity