1. A ‘market-neutral’ trading strategy is one that:
a. makes money so long as the market return is insignificantly different from zero.
b. makes money primarily when there are large swings in the market.
c. has returns which are negatively correlated with market returns.
d. has returns which are uncorrelated with market returns.?
2. Which of the following best describes a bonds recovery rate:
A. The rate of return for principal protection
B. The percentage of principal recovered in the event of default
C. The percentage of principal recovered in the event of bankruptcy
D. The bond’s market discount rate