Which of the following criteria applies to a hedge fund?

A hedge fund typically includes a lock-up provision as one of its defining criteria. This provision means that investors must commit their capital for a certain period of time and cannot redeem their shares until that lock-up period expires. This structure allows hedge funds to pursue investment strategies that may require a longer time horizon without the pressure of having to sell holdings to meet redemption requests, thus enabling more strategic and sometimes riskier investment choices.

The presence of a lock-up provision also influences the fund's ability to engage in illiquid investments. Because investors are agreeing to keep their money locked up for a specified period, hedge funds can invest in less liquid assets without the worry of needing immediate cash to respond to investor withdrawals. This characteristic aligns with the more flexible and often aggressive investment strategies employed by hedge funds compared to other types of investment funds.