16. Which of the following is the biggest risk when investing in Global Macro hedge funds? A. Credit Risk B. Model Risk C. Systematic Risk D. Manager Selection Risk 17. Based on historical data from Credit Suisse, which of the following hedge fund strategies did not have positive, moderate correlation with the MSCI World Equity index? A. Dedicated Short Bias B. Global Macro C. Merger/Risk Arbitrage D. Convertible Arbitrage 18. Which of the following statements does NOT accurately describe a risk of convertible bond arbitrage? A. Credit risk refers to the risk that bond prices will fall when credit spreads widen. B. Regulatory rulings may limit the use of leverage or short selling. C. Convertible bonds are exposed to changes in the risk-free interest rate, causing bond prices to fall when rates rise. D. The strategy uses negative correlation between the underlying stock and bond. 19. Why do CTA/Managed Futures funds tend to diversify across many different markets? A. Diversification reduces volatility and makes the options cheaper. B. It helps to avoid short squeezes. C. Trading many markets reduces margin requirements. D. At least one market should be trending even if others are not