Question: I am analyzing the two Bear Stearns funds that collapsed in the financial crisis back in 2007. I can see people arguing that one of

I am analyzing the two Bear Stearns funds that collapsed in the financial crisis back in 2007. I can see people arguing that one of the mistakes they made was that they failed to accurately predict how the subprime bond market would behave under extreme circumstances and did not accurately protect themselves from event risk. I can't really understand what they could have done.

They already had bought credit default swaps and cant really be 100 % hedged to make a profit?

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