Consider the following statements in regard to Hedge funds:
1. Hedge funds are open to all types of investors.
2. Hedge funds are immune to risk of the market and always produce positive returns.
3. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year.
Which of the statements given above is/are correct?
Explanation:
Hedge funds invest in a diverse range of markets and use a wide variety of investment styles and financial instruments.
Hedge funds are open only to certain types of investors in a country specified by the regulator and cannot be offered or sold to the general public. Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment.