After an initial hedge is in place, what do hedge fund investors in convertible bonds do with shares of the underlying stock when the stock price increases or decreases?
Answer to relevant QuestionsTrue or false: Convertible arbitrage hedge funds invest in convertible bonds because the fund managers have a bullish view on the company’s stock. Explain your answer.Describe a Credit Default Swap (CDS). What are regulators trying to do to mitigate risk in the CDS market?Describe side pockets.What are the three key benefits touted by fund of funds? Do you think that fund of funds achieved these benefits during 2008? Why or why not?What’s the benefit of staggering the election of board of directors?
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