Abstract: Abstract This chapter reviews the most important tools at the disposal of investors to measure the performance and the risks of hedge funds. It considers some well-established risk measures such as the Sharpe, Sortino, and Sterling ratios that are part of hedge fund risk management and practice. The chapter demonstrates these measures empirically using some recent hedge fund data. However, recent hedge fund studies show that hedge fund failure often results from operational issues and not from financial issues. Therefore, the chapter stresses the importance of due diligence and operational risk measures as the more important risk management tools and advocates including them in the hedge fund risk management arsenal.
Publication Year: 2015
Publication Date: 2015-01-02
Language: en
Type: book-chapter
Indexed In: ['crossref']
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