SIE practice questionmediumHedge Funds
Which practice is common for hedge funds but not for mutual funds?
- AOffering purchase to all investors regardless of net worth
- BRegulatory registration under the Investment Company Act
- CDaily public pricing of shares
- DUsing leverage and short selling to enhance returns✓ Correct answer
Explanation
Why D — Using leverage and short selling to enhance returns
A is correct; hedge funds commonly use leverage and sell short, unlike mutual funds. B, C, and D are all features of mutual funds, not hedge funds.
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