Answer-first summary for fast verification
Answer: Although prior to 2009, hedge fund returns lagged the S&P 500, since 2009, hedge funds have outperformed the S&P 500
### Why **A** is false The statement is reversed. Hedge funds generally **lagged equities before 2009**, and **since 2009 the S&P 500 has generally outperformed hedge fund indices** over long stretches. So hedge funds have **not** broadly outperformed the S&P 500 since 2009. ### Why the other statements are generally true - **B**: Distressed securities strategies often earn an **illiquidity premium** because they invest in troubled, hard-to-trade assets. - **C**: Merger arbitrage typically has **lower equity market correlation** than long/short equity. - **D**: Managed futures strategies are often **systematic** and may rely on **technical analysis**; this is less characteristic of emerging markets managers. ## Answer: **A**
Author: Manit Arora
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Q-706.3. In regard to various hedge fund strategies, each of the following statements is generally true EXCEPT which statement is false?
A
Although prior to 2009, hedge fund returns lagged the S&P 500, since 2009, hedge funds have outperformed the S&P 500
B
A Distressed Securities hedge fund investor is more likely to earn an illiquidity risk premium than a typical Global Macro manager
C
A Merger Arbitrage (aka, risk arb) hedge fund investors should have a lower correlation to the broad equity markets than a typical Long/Short Equity manager
D
A Systematic Managed Futures hedge fund investor is more likely to employ technical analysis than an Emerging Markets manager
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