Understanding Event-Driven Hedge Fund Strategies

Very Easy Hedge Fund Strategies Event-driven

John is a portfolio manager at an investment firm that focuses on alternative investments. His manager has asked him to evaluate different hedge fund strategies for the firm's portfolio. They are particularly interested in event-driven strategies, which involve taking advantage of specific corporate events that can create investment opportunities. After conducting research, John identifies several potential event-driven strategies.

Which of the following best describes an event-driven hedge fund strategy?

A strategy that invests primarily in distressed companies or assets.

A strategy that seeks to profit from price movements resulting from corporate actions such as mergers, acquisitions, or restructurings.

A strategy that involves taking large long positions in undervalued stocks without regard to any corporate events.

Hint

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