Paper Summary:

This paper examines hedge funds from both the risk model perspective and the regulatory perspective. The paper provides an analysis of the typical hedge fund investment strategy and how this strategy is overly harmful and destabilizing to traditional and regulated financial markets. The paper explains that typically, hedge funds invest with a short-term investment horizon and rely on market volatility; i.e. rapid price fluctuations, in order to capitalize on their investment strategies.

From the Paper:

"This document examines hedge funds from both the risk model perspective and the regulatory perspective. An analysis is made of the typical hedge fund investment strategy and how this strategy is overly harmful and destabilizing to traditional and regulated financial markets. Typically, hedge funds invest with a short-term investment horizon and rely on market volatility; i.e. rapid price fluctuations, in order to capitalize on their investment strategies."

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