Series 7 - General Securities Representative Exam

Preview Mode

An investor needs more exposure in instruments that are negatively correlated to equities. Which of the following MAY be appropriate?

Buying a 2x equity ETF
A
Buying an international growth fund
B
Buying a fund of funds
C
Buying VIX calls
D

Explanations

The VIX moves almost inversely to the direction of the S&P 500 stock index. a 2x equity ETF is leveraged and bullish stocks, and international fund may not be negatively correlated and we do not know what the fund of funds holds. Best answer is ( D )

Pricing