Hedge funds:
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A. B. C. D.D
Hedge funds are private investment vehicles that aim to generate returns by using a range of investment strategies, which can include leveraging and other speculative practices, as well as short-selling, derivatives, and other complex instruments. The primary goal of hedge funds is to provide high returns to investors, often by taking risks that traditional investment vehicles may not take.
Option A is correct because hedge funds often use leverage and other speculative practices to pursue profits in all kinds of markets, such as stocks, bonds, commodities, currencies, and others. This approach can lead to high returns, but it can also increase the potential for losses.
Option B is not entirely accurate. While it is true that hedge funds have fewer regulatory controls compared to mutual funds, they are still subject to some regulatory oversight by the Securities and Exchange Commission (SEC) and other regulatory bodies. For instance, hedge funds that manage over $150 million in assets are required to register with the SEC and disclose some information about their operations, holdings, and strategies.
Option C is also correct. Hedge funds have typically been marketed and offered to high-net-worth individuals and institutional investors, which have high investment minimums that can range from hundreds of thousands to millions of dollars. This has effectively restricted the participation of retail investors, who may not have access to these investment opportunities.
Therefore, option D is the correct answer. Hedge funds seek to profit in all kinds of markets by pursuing leveraging and other speculative investment practices, are subject to some regulatory controls, and have voluntarily restricted investment to wealthy investors through high investment minimums.