Chartered Alternative Investment Analyst Association (CAIA) Exam 2025 – 400 Free Practice Questions to Pass the Exam

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What is the primary goal of a hedge fund?

To maintain capital without taking risks

To achieve high returns through a wide range of investment strategies

The primary goal of a hedge fund is to achieve high returns through a wide range of investment strategies. Hedge funds are typically characterized by their flexibility in investment approaches, which may include short selling, leveraging, derivatives, and investing in a diverse array of asset classes. This adaptability allows hedge fund managers to exploit various market conditions and pursue aggressive growth opportunities.

Hedge funds are often structured to take on higher levels of risk in pursuit of greater returns compared to traditional investment vehicles. Investors in hedge funds typically seek out these potential high returns, acknowledging the associated risks involved. This contrasts with strategies focused primarily on capital preservation or consistent income, which are not the primary objectives of hedge funds.

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To provide consistent dividends to investors

To invest solely in real estate

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