SIE practice questioneasyHedge Funds
Which characteristic is most associated with hedge funds?
- ALimited liquidity and high minimum investments✓ Correct answer
- BDaily pricing at NAV
- CAvailable to all retail investors
- DRegulated by the Investment Company Act of 1940
Explanation
Why A — Limited liquidity and high minimum investments
Hedge funds usually require high minimum investments and are often illiquid. B and C are features of mutual funds, and D is incorrect because hedge funds are generally exempt from the Investment Company Act.
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