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A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in dollars and as a percent of assets under management, for portfolio returns of: a. −5% b. 0 c. 5% d. 10%

A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in dollars and as a percent of assets under management, for portfolio returns of: a. −5% b. 0 c. 5% d. 10%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of
20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in
dollars and as a percent of assets under management, for portfolio returns of:
a. −5%
b. 0
c. 5%
d. 10%

9. A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in dollars and as a percent of assets under management, for portfolio returns of: а. -5% b. 0 с. 5% d. 10%
Transcribed Image Text:9. A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in dollars and as a percent of assets under management, for portfolio returns of: а. -5% b. 0 с. 5% d. 10%
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