Using the S&P $500$ as a benchmark for a hedge fund is

Question $41$ options:

A good choice because the S&P $500$ is a widely observed measure that is easy to explain to clients and is investable$--$a

requirement for a good benchmark.

a poor choice because the S&P $500$ is based on a short term buy and sell investment strategy which does not fit with most hedge

fund strategies.

A good choice because the S&P $500$ is a broad market index, unlike the Dow Jones Industrial Average.

A poor choice because hedge funds typically employ a substantial amount of leverage and engage in short selling. The S&P $500$ does not measure leverage or short sales