Question

Funds structured to increase return through active management with the expectation of a down market are called __________.Select one:

a. lifestyle funds.

b. leveraged funds.

c. inverse funds.

d. open-end funds.

e. closed-end funds

Answer 1

Answer:

The correct answer is letter "C": inverse funds.

Explanation:

Inverse funds are types of mutual funds that perform in the opposite way to major indexes. For an inverse fund to increase, adverse economic situations must arise. These funds are typically pooled in inverse Exchange Traded Funds (ETFs) which is similar to having many short positions of different derivatives.