What is a Hedge Fund?
What are Hedge Funds?
A hedge fund is a fund raised from sophisticated investors that use strategies to have the best risk and return characteristics than other investments.
Common Hedge Fund Strategies
Some common hedge fund strategies include:
- Leverage - Using borrowed capital to enhance returns
- Short-selling - Making a bet that the value of a certain stock goes down
- Derivatives - Buying an option, future or other financial instruments that derives its value from the value of a certain asset
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