A hedge fund is a type of investment vehicle that pools money from individual wealthy and professional investors to purchase securities using non-traditional investment strategies. These strategies may include leveraging, short selling, or investing in alternative assets such as derivatives or real estate. The goal of a hedge fund is typically to generate high returns for its investors, often through aggressive and risky investments.

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A Hedge Fund

Question 17

Multiple Choice

A hedge fund:

A) takes deposits from individuals and corporations,and lends these funds to borrowers.
B) invests money in securities,property,and other assets to meet future insurance claims and hedge against any other uncertainty.
C) pools money from individual investors and other financial intermediaries to fund relatively small,new businesses.
D) pools savings from individual wealthy and professional investors to purchase securities using non-traditional investment strategies.

Correct Answer: