8. Which of the following hedge fund managers has the most extensive investment universe? A. Market neutral. B. Equity long/short. C. Global macro. D. Event driven. 9. Using the S&P 500 as a benchmark for a hedge fund is: A. a good choice because the S&P 500 is a widely observed measure that is easy to explain to clients and is investable--a requirement for a good benchmark. B. a poor choice because the S&P 500 is based on a short term buy and sell investment strategy which does not fit with most hedge fund strategies C. a good choice because the S&P 500 is a broad market index, unlike the Dow Jones Industrial Average. D. a poor choice because hedge funds typically employ a substantial amount of leverage and engage in short selling. The S&P 500 does not measure leverage or short sales. 10. Which of the following types of hedge fund strategies has the least exposure to credit risk? A. Event driven. B. Merger arbitrage. C. Market neutral. D. Fixed income arbitrage. 11. If you are hedge fund manager and expecting a bear market in the US and believe the market will drop over the next 12 months and experience a crisis similar to 2008-2009, then which hedge fund strategy would make money during this period? A. Global Macro B. Short-selling C. Market Neutral D. Fund of Hedge Funds 12. Which of the following four hedge fund strategies would be most likely to include the other three strategies? A. Merger arbitrage B. Fixed income arbitrage C. Relative value arbitrage (Pairs Trading) D. Convertible arbitrage 13. Which types of securities do Regulation D hedge funds typically invest? A. Private securities of companies in financial distress or in bankruptcy B. Public securities of companies in financial distress or in bankruptcy C. Private securities that are newly issued by public companies D. Public securities that are newly issued by companies going public