Hedge funds: Omniscient or just plain wrong

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Abstract

The objective of this paper is to set a framework for a reasoned discussion of hedge funds. I shall first describe what they are and what they do. The compensation arrangements for hedge funds would appear to encourage risk-taking behavior that generates extraordinary returns. Interestingly enough, hedge fund returns are not extraordinary. They are not the gunslinging risk-takers of public perception. In fact, an analysis of the events of 1997 suggest, if anything, that they were somewhat gun-shy. We shall examine why this is the case. We shall conclude by examining their widely publicized role in the Asian currency crisis. © 2001 Elsevier Science B.V.
Original languageEnglish
Pages (from-to)301-311
JournalPacific Basin Finance Journal
Volume9
Issue number4
Publication statusPublished - Aug 2001
Externally publishedYes

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