Hedge funds employ complex strategies to generate returns from "summary" of Financial Markets and Institutions, Global Edition by Frederic S. Mishkin,Stanley G. Eakins
Hedge funds are unique financial institutions that utilize intricate methods in order to produce profits for investors. These funds employ a wide range of strategies that are often complex and sophisticated, setting them apart from traditional investment vehicles. Through the use of these strategies, hedge funds aim to generate high returns for their clients. One common strategy used by hedge funds is long-short equity trading, where managers simultaneously buy and sell stocks in order to capitalize on market inefficiencies. This strategy involves taking long positions in stocks that are expected to increase in value, while also taking short positions in stocks that are anticipated to decline. By doing so, hedge funds can potentially profit from both rising and falling markets. In addition to lo...
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