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A hedge fund buys the higher priced share A and short sells the lower priced share B for the same exposure. Which of the following
A hedge fund buys the higher priced share A and short sells the lower priced share B for the same exposure.
Which of the following scenarios will bring a loss?
A. | The decrease in price A is smaller than the decrease in price B. | |
B. | As its name suggests, a hedge fund cannot lose with this type of strategy. | |
C. | Price A increases and price B decreases. | |
D. | The increase in price A is smaller than the increase in price B. |
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