The Not-So-Real McCoy

Two leading academics show how easy it is for unskilled managers to fake alpha.

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The current shakeout in the hedge fund industry is capturing headlines, as managers who suffered large double-digit losses in 2008 are likely to have little choice but to shutter their funds. But even if the past year’s turbulent financial markets had been more forgiving, the business would be facing a serious challenge from another source.

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