CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

Which type of hedge funds typically has a low standard deviation?

A. Market neutral funds.
B. Arbitrage-based funds.
C. Global macro funds.
Correct Answer: B

They are the hedge funds that explicitly hedge.

User Contributed Comments 2

User Comment
ankurwa10 Did not get this. should this not be true for market neutral funds. Intuitively, it should end up giving you what the market makes?
birdperson market-neutral shoot for a beta of 0, so if they make what the market makes (which has beta of 1) it would be a solid investment (considering its role in a portfolio)
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