REVIEW QUESTIONS

1. This chapter stresses that the main lesson to take away from Long Term Capital Management is that

a. It is important that a hedge fund manager stay within his designated style, or investment mandate scope.

b. Foreign exchange investing inside of hedge funds can be very risky when those bets are made using only a single prime brokerage firm.

c. Even well-respected hedge funds can blow up.

2. This chapter indicates that ______ is bad for investors, bad for the industry, and particularly bad for emerging hedge fund managers.

a. Too much transparency.

b. Too much compliance reporting.

c. Eliminating hedge funds from due diligence processes mostly based on AUM.

d. Eliminating hedge funds from due diligence processes mostly based on background checks.