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CFA Level 2
Portfolio Management

Managing Market Risk with Hedges

Easy Risk Management Applications Managing Market Risk

ABC Investment Management is a firm with a diversified portfolio that includes equities, fixed income, and alternative investments. Recently, the firm's risk management committee has expressed concerns about the potential for adverse market movements affecting its equity holdings. To manage this market risk, the committee is considering various strategies.

Which of the following strategies would most effectively reduce the market risk associated with ABC's equity portfolio without significantly altering the portfolio's overall investment strategy?

Hint

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% Correct69%