Looking at the comparison of hedge fund returns versus the S&P 500 index’s returns in Exhibit 11.12, even if hedge funds are not always successful at generating absolute returns, what benefit do they seem to offer investors?
Answer to relevant QuestionsWhat are some positive consequences resulting from the proliferation of hedge funds?When is merger arbitrage an attractive investment strategy? What are the downside risks of this strategy?What’s the benefit of staggering the election of board of directors?Explain the importance of hedge funds to investment banks, including revenue, types of business, and which division is most relevant. In addition, with which investment banking areas do hedge funds principally compete?Classifying some of the largest hedge funds as Tier 1 financial holding companies would subject these funds to requirements regarding capital, liquidity, and risk management. The rationale for this is that a large hedge ...
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