The textbook says FOF usually do not impose a lock up period, but why? Some articles on internet mentioned that FOF usually follows the lock-up period of hedge funds that it invests in.
Presumably because they “Diversify” across lock up periods, and, there is effectively no (common)lock up period…
(Even though the funds they invest in,have a lock up period,individually).
Thanks Elementary Dear…
You are welcome mate…
This is where I feel concerned about L3 because a lot of my real world experience is in portfolio management. I work with a lot of FOF and many have lockups in practice. So my experience tells me one thing but I have to try and put that out of my mind for what the material says. L2 was easy because I have no experience in valuation so I just took the material at face value.
Good luck to you!
^ yes, nip this kind of granularity in the bud and focus on sythesizing the material.