Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 26, Problem 1PS
Summary Introduction
To determine:
For an investor's entire retirement portfolio, can market-neutral hedge fund be a good candidate.
Introduction:
Market neutral fund means by using the short and long positions, the investor can make a profit in a volatility trending environment.
Expert Solution & Answer
Explanation of Solution
An investor's entire retire portfolio should not include market neutral hedge fund, because it is not a good option for retired investors. In fact, a retired investor should not involve any type of hedge in their portfolio. The hedge fund usually reveals a higher risk and the government also does not made proper rules and regulation.
So, it is advisable to a retired investor that he should not invest in a market neutral hedge fund.
Conclusion
Therefore, retired investors should not involve the market neutral fund in their portfolio.
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