Answer: experienced lower volatility than funds-of-funds.

## Explanation Multi-strategy funds typically experience **lower volatility than funds-of-funds** because: - **Multi-strategy funds** operate within a single legal entity and allocate capital across different strategies internally, allowing for better risk management and diversification benefits. - **Funds-of-funds** invest in multiple external hedge funds, which introduces additional layers of fees and potential correlation issues between the underlying funds. - The internal capital allocation and risk management in multi-strategy funds typically result in more stable returns and lower overall volatility compared to the external fund selection approach of funds-of-funds.

Author: LeetQuiz Editorial Team