CFA Practice Question
Select the correct statement(s).
II. One drawback of fund of funds investing is higher fees.
I. Market-neutral fund is a hedge fund classification.
II. One drawback of fund of funds investing is higher fees.
A. I only
B. II only
C. I and II
Explanation: There are two layers of fees in fund of funds investing.
User Contributed Comments 3
| User | Comment |
|---|---|
| tijelo | Why C? |
| ChaseF | Market-neutral funds are a classification listed in the text, so (I) is correct. An investor in a fund of funds is charged a fee by the fund of fund manager and each of the sub-funds also charges a fee, so (II) is also correct. |
| nmech1984 | actually, "market-neutral fund" is sub-classification of equity hedge funds. |