CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

If a hedge fund engages in things like management replacements, capital structure changes, and expenditure cuts, such a fund is mostly likely pursuing a ______ strategy.
A. restructuring.
B. activist.
C. special situation.
Explanation: Most hedge funds invest using unconventional strategies, but others take a more active role in realizing the value in their investments - these are known as activist hedge funds. Activist hedge funds not only engage the company's board and management in discussion, but also wage proxy battles, liquidate assets and even force sales of companies.

User Contributed Comments 2

User Comment
chcarnes Is a capital structure change not restructuring?
Inaganti6 super easy to answer if you've heard of Carl Icahn
You need to log in first to add your comment.