Money and Banking

Running Head : MONEY AND BANKING : HEDGE OPTIONS

Money and Banking : Hedge Options

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Hedge funds have been a controversial for many years , believing that these are unregulated investment vehicles (Phillips and Surz 2003 ) since the name itself poses negative connotations but given the vast studies and literature on hedge must be careful to analyze its controversies over benefits

Hedge funds have been linked to diversification and performance with various strategies and styles , contributing to capital adequacy and risk management but associated with inappropriate managerial behavior and performance

(Fong , 2005 . Hedge funds are difficult to define which becomes problematic because there are other investments that overlap and can be identified as other type of investments . After many decades when the first hedge fund was identified , numerous hedge funds sprouted causing confusion (McCary , 2004 . There may be different types of hedge but one must be keen to understand how it developed and the current strategies that can be used to manage it very well

It was believed that the first hedge fund was created in 1949 by Alfred Winslow Jones , where the fund was used as a limited partnership ' and applied private placement rules in to avoid registration . This resembled the usual hedge fund strategy nowadays - long /short equity . A hedge fund is defined as a loosely regulated investment company that charges incentive fees ' that often seek to generate returns not highly correlated to returns on stocks and bonds (McCary , 2004 . These have been misunderstood by many people and...