CFA Practice Question

CFA Practice Question

Which of the following is correct?
A. Funds of Funds are able to provide the retail investors access to hedge funds that they otherwise may not be able to invest in.
B. Diversification using Funds of Funds results in lower fees compared to diversification using Exchange Traded Funds.
C. By looking at past performance of hedge funds, Funds of Funds are able to consistently identify hedge funds that will provide superior future returns.
Explanation: Funds of Funds have two levels of fees, which can total to be quite high. ETFs are marked by low fees. Funds of Funds haven't shown to be able to pick winners consistently.

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