24. One of the advantages of hedge fund investing is that: A. their returns have low correlations with traditional asset returns B. offer global diversification C. outperform stock markets in bull markets and outperform stock markets in bear markets D. are less regulated than stock and bond markets as well as private placements markets 25. Fixed-income arbitrage involves: A. purchasing one fixed income security and simultaneously buying a similar fixed income security B. purchasing one fixed income security and simultaneously selling a similar fixed income security C. purchasing equities and simultaneously selling similar equities D. None of the above 26. Convertible arbitrage: A. builds long positions of convertible bonds and then hedge the equity of the bonds by selling the underlying stock B. builds short positions of convertible bonds and then hedge the equity of the bonds by selling the underlying stock C. builds long positions of convertible bonds and then hedge the equity of the bonds by buying the underlying stock D. builds long and short positions of convertible bonds 27. Suppose that a buying on margin account has a 50% initial margin and 40% maintenance margin. If the stock price is $100, a 60,000 deposit buys 600 shares, where borrowed amount is 30,000 and Equity Capital is 30,000. If the stock price becomes $120, what is the borrowed amount and what is the Equity capital: A. Borrowed=30,000/ Equity=42,000. B. Borrowed=42,000/ Equity=30,000 C. Borrowed=30,000/ Equity=72,000. D. Borrowed=30,000/ Equity=12,000. 28. Suppose that a buying on margin account has a 50% initial margin and 40% maintenance margin. If the stock price is $100, a 60,000 deposit buys 600 shares, where borrowed amount is 30,000 and Equity Capital is 30,000. How far can the stock price fall before there is a margin call: A. 83.33 B. 166.67 c. 116.67 D. 33.33 29. Suppose that a short selling account has a 50% initial margin and 30% maintenance margin. With a margin of $30,000 and a stock price of $100 one can sell short 600 shares. How much can the stock price rise before there is a margin call? A. $115.38 B. $150 C. $105 D. $120