CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

A primary difference between a multi-strategy hedge fund and a fund of funds is:
A. the different investment structures.
B. the extra layer of fees associated with a fund of funds.
C. the different strategies they specialize in.
Explanation: Large, multi-strategy funds are an alternative to funds of funds.

User Contributed Comments 3

User Comment
tomalot What? That have totally different strategies i.e. main diff
ascruggs92 No, the strategies are the same in the sense that they are multi-strategy. The difference is that one is a single hedge fund with multiple strategies and the other invests in multiple hedge funds, each with different strategies. The primary difference is therefore the fee structure
BossMan The answer must be "C". A fund of fund that invests in ETFs for example may not be more expensive. The fund of fund and the multi-strat hedge fund (a single fund) are entirely different strategies.
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