Hedge Fund Stock Trading in the Financial Crisis of 2007–2009

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CFA Digest
May 2012 | Vol. 42 | No. 2 | 3 pages
Source: CFA Institute
Itzhak Ben-David Francesco Franzoni Rabih Moussawi
Victoria J. Rati, CFA (Reviewer)

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Abstract

During the 2007–09 global financial crisis, hedge funds significantly reduced their U.S. equity holdings. The authors quantify the extent of the sell-offs and study possible causes. They discover that hedge funds were forced sellers because of investor redemptions and lender margin calls and that hedge funds have particular characteristics that make them more vulnerable to sell-offs during crises.

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Topics
Alternative Investments
    :
  • Hedge Funds
|
Behavioral Finance
    :
  • Limits to Arbitrage
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