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1.
What is a hedge-fund replication strategy?
One that attempts to match the returns of an index of hedge funds through ETF, futures, or swap contracts. A hedge fund replication strategy takes long and short positions in ETFs, futures, and swaps to mimic the returns of a hedge fund index in an ETF or mutual fund vehicle. These strategies can provide equity-like returns with less volatility than equity indexes.
2.
When investing in currencies via exchange-traded funds, a long position in one currency always means a _______ in another currency.
Short position. The two positions are used in tandem.
3.
Inverse exchange-traded funds offer _______.
The exact opposite return of a particular index. Thus the name 'inverse.'
4.
Futures-based, long-commodity exchange-traded funds work best as what kind of strategy?
Tactical. The other terms refer to currency-oriented ETF strategies.
5.
Price momentum, valuation, and carry are all examples of ________.
Long positions and short positions. These strategies use both long and short positions to expose themselves to currencies.
