SIE - Securities Industry Essentials Exam

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An equity hedge fund is using a long / short strategy. Which of the following MAY be true of the hedge fund?

The fund will have a positive correlation to to the direction of the broad stock market
A
The fund will have a negative correlation to long term interest rates
B
The fund may have a negative correlation to the direction of the broad stock market
C
The fund may have holdings that include DPPs
D

Explanations

The fund's strategy is to be long and / or short stocks. Since they can short stocks, this could provide a negative correlation to the direction of the overall market.