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The beneficiary of a trust who reaches adulthood and inherits assets that are mostly liquid meets with an investment advisor to consult on various investment options. During the meeting, the beneficiary expresses an interest in understanding the different types of funds, especially hedge funds. Which of the following statements, if made by the investment advisor, is correct?
A
Market timing skills of indexed fund managers are more important than market timing skills of hedge fund managers.
B
Demands of institutional investors regarding the privacy of their investments have caused hedge funds to become less transparent over time.
C
Leveraging of investor capital and shorting securities are practices that are used more extensively by hedge funds than by most conventional funds.
D
Hedge funds must disclose their investment strategies to existing and prospective clients but exchange-traded funds do not have to.