SIE Understanding Products and Their Risks Practice Question 82

Correct Answer: D

Explanation:

D: Choice D is correct because all income earned by a U.S. person is subject to the Internal Revenue code. Choice A is incorrect because a hedge fund may set up both an "offshore" fund for non-U.S. investors and an "onshore" fund for U.S. investors. Choice B is incorrect because an "offshore" hedge fund is typically set up as a corporation. Choice C is incorrect because an "onshore" hedge fund is generally established as a Limited Liability Corporation (LLC) or a limited partnership.