Question

What are the fundamental differences between mutual funds and hedge funds?

Answer 1

The correct answers are: 

A.)mutual funds are more strictly regulated than hedge funds
D.)mutual funds collect money from investors while hedge funds from companies

Mutual funds are investment programs that are funded by shareholders while hedge funds are invested funds from borrowed money. In terms of an investment program, mutual funds are more effective.

Answer 2

Answer:

Explanation: The Difference Between Mutual Funds And Hedge Funds. Both mutual funds and hedge funds are managed portfolios. ... Unlike mutual funds, hedge funds take speculative positions in derivatives, and they short sell stocks. With increased leverage comes increased risk, but also the chance to gain when the market is falling.

Hedge funds and mutual funds are both “pooled” vehicles, but there are more differences than similarities. For instance, a mutual fund is registered with the SEC, and can be sold to an unlimited number of investors. Most hedge funds are not registered and can only be sold to carefully defined sophisticated investors.