In the expanded Fundamental Law of Active Portfolio management, the factor that reflects the amount of information not lost in the implementation of a portfolio is referred to as the:

a.

breadth.

b.

transfer coefficient.

c.

information coefficient.

d.

investability coefficient.

Which of the following statements regarding funds of hedge funds is FALSE?

a.

Funds of hedge funds typically do not add additional leverage to the portfolio.

b.

The specialized fee schedule of funds of hedge funds makes them cheaper for investors than individual hedge fund strategies.

c.

Funds of hedge funds tend to have less risk than individual hedge Fund strategies.

d.

Funds of hedge funds are best categorized as opportunistic trading strategies.

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