SIE practice questioneasyHedge Funds — Accredited Investors
Hedge funds are typically available only to:
- AAccredited investors and qualified purchasers who meet specific income or net worth requirements✓ Correct answer
- BInvestors with at least 10 years of investing experience
- CAll retail investors regardless of income or net worth
- DGovernment employees only
Explanation
Why A — Accredited investors and qualified purchasers who meet specific income or net worth requirements
Hedge funds are generally limited to accredited investors (individuals with income over $200,000/$300,000 for couples, or net worth over $1 million excluding primary residence) and/or qualified purchasers (individuals with $5 million+ in investments). This restriction exists because hedge funds use complex strategies, are lightly regulated, and carry significant risks not suitable for typical retail investors.
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