Answer:

Derivative transactions are designed to increase risk and are used almost exclusively by speculators who are looking to capture high returns.

Answer: False

Explanation: Generally derivative transactions is used  for hedging operations so that reduction in risk so as speculation transactions are used to increase the risk to gain high returns

2

Hedge funds typically have large minimum investments and are marketed to institute- tions and individuals with high net worth.

Answer: True

Explanation: This sentence is true because hedge fund have generally have minimum bid of amount exceeding $ 1  million

3

Hedge funds have traditionally been highly regulated.

Answer: False

Explanation: This sentence is false because we can see in the market that, Hedge Funds are largely unregulated on the other hand we could say that mutual fund are those which are highly regulated by SEC because they target small investor of the market

4

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

Answer: True

Explanation: The New York Stock Exchange has  its physical location is in NY and on the other hand NASDAQ is an OTC market

5

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

Answer: False

Explanation: Generally larger bid are made for realizing a higher profit. Bid ask spread is the figure by which the ask price exceed the bid. and this is the main reason of the difference in price between highest price that buyer is ready to pay and the lowest price where seller is ready to sale