Chapter 26, Problem 6PS

Summary Introduction

To select:

The reason by which investor in a fund of funds would earn less return in comparison to investing in an individual hedge fund, if an investor is considering hedge fund investing.

Introduction:

A fund of funds is an investment strategy in which investor invests in different type of underlying assets rather than investing only in stocks, securities or bond.

A hedge fund is a fund which is outside from government jurisdiction. It is mainly for a private limited partnership, where they use the borrowed capital and make the speculation.