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Answer: Different index providers may have minimal overlap in their hedge fund index constituents.
**Explanation:** - **Option A** is incorrect because hedge funds are generally unregulated and not required to report their performance. Therefore, hedge fund indexes are unlikely to consist of regulated entities. - **Option B** is incorrect because voluntary performance reporting can lead to survivorship bias, as only funds with favorable performance may choose to report. - **Option C** is correct because hedge funds often report their performance to only one database. This results in little overlap between the constituents of different hedge fund indices. Consequently, different global hedge fund indices may reflect significantly different performance for the hedge fund industry over the same period.
Author: LeetQuiz Editorial Team
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Which of the following statements best characterizes hedge fund indexes?
A
Index constituents are typically unregulated entities.
B
Voluntary performance reporting can introduce survivorship bias.
C
Different index providers may have minimal overlap in their hedge fund index constituents.
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