Hedge funds ______ engage in market timing ______ take extensive derivative positions.

A) cannot; and cannot
B) cannot; but can
C) can; and can
D) can; but cannot
E) None of the options are correct.

Market Timing

The strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements, often with the goal of buying low and selling high.

Derivative Positions

Financial contracts whose value is derived from the value of an underlying asset.