CONNECT WITH LEARNSMART FOR BODIE: ESSE
CONNECT WITH LEARNSMART FOR BODIE: ESSE
11th Edition
ISBN: 2819440196239
Author: Bodie
Publisher: MCG
Question
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Chapter 20, Problem 1PS
Summary Introduction

To determine:

For an investor's entire retirement portfolio, can market-neutral hedge fund be a good candidate.

Introduction:

Market neutral fund means by using the short and long positions, the investor can make a profit in a volatility trending environment.

Expert Solution & Answer
Check Mark

Explanation of Solution

An investor's entire retire portfolio should not include market neutral hedge fund, because it is not a good option for retired investors. In fact, a retired investor should not involve any type of hedge in their portfolio. The hedge fund usually reveals a higher risk and the government also does not made proper rules and regulation.

So, it is advisable to a retired investor that he should not invest in a market neutral hedge fund.

Conclusion

Therefore, retired investors should not involve the market neutral fund in their portfolio.

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