A hedge fund manager engages in a relative value trade. She takes a long position on GM
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Question:
A hedge fund manager engages in a relative value trade. She takes a long position on GM Holden and a short position on Ford.
Why is this trade a 'market neutral' strategy?
ABC company announces that it will acquire XYZ company. Based on this event, outline a relative value trade that a hedge fund manager could employ to profit the fund.
What is the rationale behind the trade?
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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