Question
A hedge fund buys the higher priced Rio Tinto share and short sells the lower priced BHP share for the same exposure. Which of the
A hedge fund buys the higher priced Rio Tinto share and short sells the lower priced BHP share for the same exposure.
Which of the following scenarios will bring a gain to the hedge fund?
| A. | Price of Rio Tinto share increases by $20 and price of BHP share increases by $30 | |
| B. | Price of Rio Tinto share decreases by $30 and price of BHP share decreases by $50 | |
| C. | Price of Rio Tinto share decreases by $30 and price of BHP share increases by $30 | |
| D. | Price of Rio Tinto share decreases by $30 and price of BHP share decreases by $30 | |
| E. | Price of Rio Tinto share increases by $30 and price of BHP share increases by $30 |
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The Financial Services Marketing Handbook
Authors: Evelyn Ehrlich
2nd Edition
1118065719, 978-1118065716
