Explanation : Funds of funds presumably have some expertise in conducting due
diligence on hedge funds and may be able to negotiate more favorable
redemption terms than an individual investor in a single hedge fund.
Explanation : If a quoted market price is available for an emerging markets fixed income
security, the use of liquidity discounts or “haircuts” is actually inconsistent with
valuation guidance under most generally accepted accounting standards.
However, many practitioners believe that liquidity discounts are necessary to
reflect fair value.