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Genius capital is long $2,310,000 of big bank stock, and short $2,131,000 of tiny bank stock. Net exposure of genius capital is?

Sagot :

What Is Net Exposure?

Net exposure is the difference between a hedge fund’s long positions and its short positions. Expressed as a percentage, this number is a measure of the extent to which a fund’s trading book is exposed to market fluctuations

Net exposure of genius capital is = $2,310,000 ---$2131,000

                                                                  = $1790,00

Understanding Net Exposure

Net exposure reflects the difference between the two types of positions held in a hedge fund's portfolio. If 60% of a fund is long and 40% is short, for example, the fund's gross exposure is 100% (60% + 40%), and its net exposure is 20% (60% - 40%), assuming the fund uses no leverage (more on that below). The gross exposure refers to the absolute level of a fund's investments, or the sum of long positions and short positions.

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