Hedge Fund Strategies

Free CFA Level II lesson in Alternative Investments. 15 min read, ~2,244 words.

Six families: equity long/short, event-driven, relative value, global macro, managed futures, multi-strategy. Classify by source of profit: corporate event = event-driven, price convergence = relative value, neither = classify by instrument and approach. Net exposure = directional sensitivity. Gross exposure = leverage. Alpha = gross return minus (net exposure ×...