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Greta Lundbörg is an active portfolio manager at Green Paradise Hedge Fund
Greta Lundbörg is an active portfolio manager at Green Paradise Hedge Fund. Please mark the only portfolio management strategy that, as an active PM Greta is unlikely to follow:
a. generate alpha for her fund by carefully relying on security analyst’s bottoms up stock picks
b. go long energy stocks (oil companies) and hedge the position by buying oil puts
c. manage her Green Tech Fund by simply replicating the Nasdaq index
d. use macroeconomic research to market timing
Expert Solution
Answer:
c. manage her Green Tech Fund by simply replicating the Nasdaq index
Explanation:
~ Option c, that is, managing portfolio by simply replicating the Nasdaq index is a strategy of "Passive management" of portfolio, not active management.
~ Therefore, since Greta is an active portfolio manager, she is unlikely to follow the strategy of simply replicating the index, because it is a passive management strategy.
~ All the other options are various examples of active management of portfolio, therefore Greta is likely to follow option a, b ,d.
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