What strategy might a hedge fund use to take advantage of positive alpha in a long equity position?

Question

Quizplus · Accepted Answer

A hedge fund may use leverage to increase their exposure and returns from a long equity position with positive alpha. By using the proceeds to go long in the alpha security, the hedge fund can amplify their returns. Short selling the security with positive alpha would be counterproductive, as it would result in losses if the security continues to increase in value. Creating a neutral position may not be as effective in generating returns from positive alpha. Reducing reliance on margin would not provide any direct benefit in taking advantage of positive alpha.

What Strategy Might a Hedge Fund Use to Take Advantage