SIE practice questioneasyHedge Funds
A major difference between a hedge fund and a mutual fund is that hedge funds:
- AInvest primarily in government bonds
- BAre generally only available to accredited or sophisticated investors✓ Correct answer
- CAre registered under the Investment Company Act of 1940
- DCan be purchased and redeemed daily by the general public
Explanation
Why B — Are generally only available to accredited or sophisticated investors
Hedge funds are generally limited to accredited or sophisticated investors and may use diverse strategies. Mutual funds are the products registered for broad public daily purchase and redemption.
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