Answer the Questions on Derivative instruments

Explain whether the following statement is true or false.

• Derivative transactions are designed to increase risk and are used almost exclusively.

• Hedge funds generally charge higher fees than mutual funds.

• Hedge funds have traditionally been highly regulated.

• The New York Stock Exchange is an example of a stock exchange that has a physical location.

• A larger bid-ask spread means that the dealer will realize a lower profit.

• The efficient market hypothesis assumes that all investors are rational.