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Answer: Alternative investments fall outside the scope of long-only positions in stocks, bonds, and cash.
**Explanation:** - **Option A** is incorrect because alternative assets are typically less efficiently priced than traditional marketable securities. This inefficiency provides opportunities for active management to exploit market anomalies. - **Option B** is correct. Alternative investments often involve illiquidity, transactions in private markets, or sophisticated strategies, distinguishing them from traditional long-only investments in stocks, bonds, and cash. - **Option C** is incorrect because alternative investments generally have a low correlation of returns with traditional investments, which is one of their key benefits for portfolio diversification.
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Which of the following statements is most accurate regarding alternative investments?
A
Alternative investments tend to be more efficiently priced than traditional investments.
B
Alternative investments fall outside the scope of long-only positions in stocks, bonds, and cash.
C
Alternative investments exhibit a relatively high correlation of returns with traditional investments.