SIE practice questionmediumHedge Funds
Compared to mutual funds, hedge funds are generally:
- ARequired to register with the SEC under the Investment Company Act of 1940
- BOffered to retail investors with daily liquidity
- CLess regulated and more flexible in investment strategies✓ Correct answer
- DLimited to investing in stocks and bonds only
Explanation
Why C — Less regulated and more flexible in investment strategies
A is correct; hedge funds are less regulated and can use a wide array of strategies. B is incorrect—hedge funds are limited to accredited investors. C is false—many hedge funds are exempt from such registration. D is incorrect as their investments are diverse.
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