Help
Additional ETF Courses Intermediate: Investing in Alternatives with Exchange-Traded Funds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Merger arbitrage involves buying stocks that are acquisition targets and _______.
Choose wisely. There is only one correct answer.
Shorting the stocks of the acquiring companies or a broad index of stocks. Merger arbitrage is a type of long-short strategy.
2.
When investing in currencies via exchange-traded funds, a long position in one currency always means a _______ in another currency.
Choose wisely. There is only one correct answer.
Short position. The two positions are used in tandem.
3.
What is a hedge-fund replication strategy?
Choose wisely. There is only one correct answer.
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.
4.
Futures-based, long-commodity exchange-traded funds work best as what kind of strategy?
Choose wisely. There is only one correct answer.
Tactical. The other terms refer to currency-oriented ETF strategies.
5.
In order for an inverse exchange-traded fund to provide several times an index's return, it must use leveraging.
Choose wisely. There is only one correct answer.
True. Along with compounding, such a fund would use leverage to achieve its aim in a bear market.
Introduction to Investing in Alternatives with Exchange-Traded Funds Commodity and Currency Exchange-Traded Funds Bear Market Exchange-Traded Funds Long-Short and Other Alternatives in Exchange-Traded Funds Summary of Investing in Alternatives with Exchange-Traded Funds Find out what you learned