A hedge fund is a relatively unregulated private investment partnership open only to wealthy individuals and institutions. a.False b.True

A hedge fund is a relatively unregulated private investment partnership open only to wealthy individuals and institutions.
a.False
b.True

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Answer

• b.True
  Explanation:

• Hedge funds are private, high-risk, unregulated investment pools for the wealthy individuals and institutions.
• This is open to wealthy individuals because they can easily meet significant minimum investment thresholds required.
• Today, the industry is open to middle-class investors through pension funds.
• The fact that the industry is unregulated and has no regulatory scrutiny, it is more vulnerable to fraud by fund managers.
• Among the drawbacks associated with its high risk of fraud include market timing, late trading, insider trading etc.

Reference
Criminology: Theories, Patterns, and Typologies
By Larry J. Siegel Page 448