Equity strategies: long/short, market neutral, short bias CFA Flashcards - Medical Study Cards
Master Equity strategies: long/short, market neutral, short bias with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.
Equity strategies: long/short, market neutral, short bias Flashcard Deck - 10 Cards
Flashcard 1: HF strategies with high sharpe & sortino ratios:
Answer: - systematic futures
- equity market neutral
- global macro
- event-driven
Flashcard 2: What is an equity market neutral HF strategy?
Answer: - obtain near-zero overall exposure to the stock market
- alpha comes from mispriced securities
- low returns, low volatility, significant diversification
- leverage used
- successful strategy when markets are volatile and performing poorly
Flashcard 3: NAV =
Answer: \= GAV - total debt - other liabilities
Flashcard 4: What are equity related HF strategies?
Answer: - focus on stocks
- equity risk is primary source of risk
- subtypes: long/short equity, dedicated short bias, equity market neutral
Flashcard 5: Describe a carry trade's return distribution
Answer: negatively skewed, fat tails
Flashcard 6: What is a managed futures HF strategy?
Answer: - take long/short positions in futures, forwards, options on futures, swaps & currencies/commodities
- enter derivative contracts, not buying asset
- fund uses 1/8 of its capital as collateral on futures contracts, the rest is invested in a highly liquid security that can also servce as collateral for the futures clearing house
- highly liquid (futures trade globally and continously)
- subject to "crowding": many pursue same trades
- size of positions based on correlation and volatility
- Little correlation with traditional equity & fixed-income assets
- exit methodologies based on price targets, momentum reversal, time, trailing stop-loss
Flashcard 7: HF strategies with smallest max drawdowns:
Answer: - global macro
- systematic futures
- merger arbitrage
- equity market neutral
Flashcard 8: What are multi-manager HF strategies?
Answer: - use other HF strategies as building blocks, combining different strategies together and rebalancing exposures over time
- subtypes: multi-strategy funds and FofFs
Flashcard 9: What are specialist HF strategies?
Answer: - risks of these strategies arise due to exposure to specific sectors or unsual securities
- subtypes: volatility strategies an reinsurance strategies
Flashcard 10: If the deal is expected to go through in a merger arbitage...
Answer: long target company and short acquisition company
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