CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

Market neutral funds are best described as:

A. Funds managed to have no interest rate risk.
B. Funds managed to have no exchange rate risk.
C. Funds managed to have net neutral exposure to equities.
Correct Answer: C

Market neutral funds are stock funds that take long positions in undervalued stocks and short positions in overvalued stocks, but on average the value of long positions equal the value of short positions, so that the overall fund is neither long nor short with respect to equities.

User Contributed Comments 3

User Comment
vatsal92 Market here refers to equities.
khalifa92 buy long sell short
ewantanner uy high sell low.
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