An investor has invested $10 million in a privateequity fund with a 2% management fee and a 20%incentive fee.The fund has an onshore feeder with a grossasset value of $100 million and an offshorefeeder with a gross asset value of $50 million.The fund has a soft hurdle rate of 10%.The fund has not yet crystallized any gains andhas not yet conducted any equalizations. Thenet asset value of the fund is $125 million.b) What is the total incentive fee charged by thefund?A $22.4mB$22.3mC $22.5mD $22.2m

The total incentive fee charged by the fund is $22.4 million Calculate the net investment income…

Answered: An investor has invested $10 million in…

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

Problem 1PS

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Similar questions

A fund starts the year with NAV 54 per share. Over the year, the fund pays out income of 3.25 per share and capital gains distributions of 3.75 per share. Assets in the portfolio grew (shrank) by 0.01, and an expense ratio of 0.016 is charged at the end of the year. What is the rate of return on the fund? (Hint: calculate NAV1 first) O 0.0953 O 0.1110 O 0.1169 O 0.1055 0.1235
An investor has $80,000 to invest in a CD and a mutual fund. The CD yields 8% and the mutual fund yields 7%. The mutual fund requires a minimum investment of $9,000, and the investor requires that at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in CDs and how much in the mutual fund to maximize the return? What is the maximum return? To maximize income, the investor should place $ in CDs and $ in the mutual fund. (Round to the nearest dollar as needed.)
A pension fund is investing $60 million in a well-diversified equity portfolio E and $30 million in a well-diversified bond portfolio B. Total assets under management (portfolio of E and B) has expected return of 8% and standard deviation of 5%. Recently, the fund acquired new capital of $10 million and will use it to invest in a Cryptocurrency portfolio C. C is known to have expected return of 12% and standard deviation of 10%. Also, it is known that the covariance between E and C is 0.8% and the covariance between B and C is 0.4%. What would be the expected return and the standard deviation of the total assets under management (portfolio of E, B and C) when the fund makes this new investment?
A fund starts the year with NAV 46 per share. Over the year, the fund pays out income of 2.5 per share and capital gains distributions of 2.5 per share. Assets in the portfolio grew (shrank) by -0.0025, and an expense ratio of 0.014 is charged at the end of the year.. What is the rate of return on the fund? (Hint: calculate NAV1 first) O 0.0969 O 0.1076 O 0.1002 O 0.0877 O 0.0922
The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $450 million. It has liabilities of $4 million and 8 million shares outstanding. If the fund sells for $53 a share, what is its premium or discount as a percent of NAV? Multiple Choice
An endowment invests $150,180,000 in WeGrow II, an early-stage venture fund with a 20% incentive fee and a 5% preferred return [hurdle rate]. The fund invests in the following companies (for simplicity, ignore staged financing and management fees; assume instead that all investments occur at the end of their denoted year): Investment (Year Invested) $ 35,030,000 (2) $ 20,030,000 (2) $ 15,030,000 (2) $ 20,030,000 (3) $ 25,030,000 (3) $ 100,030,000 (7) $ 125,030,000 (10) $0 (9) $ 35,030,000 (4) Instead of a 5% preferred rate, assume there is an 8% preferred rate with a 100% catch-up. Required: a. Recalculate the yearly cash flows. b. What is the IRR to the endowment, net of fees? Start-up Name SPE Incorporated NiteID Corporation D-Ton Incorporated IKL Limited H&L Innovations SimLife Technologies Complete this question by entering your answers in the tabs below. Required A Recalculate the yearly cash flows. Note: Negative amounts should be indicated by a minus sign. Year Net Cash Flows 1…
1. A mutual fund with K100 million in assets at the start of the year and with 10 million shares outstanding invests in a portfolio of stocks that provides no income but increases in value by 10 %. Required: What is the rate of return in the fund? If a fund has an initial NAV of K20 at the start of the month makes income distributions K0.15 and capital gain distributions of K0. 05 and ends the month with NAV of K20.10. Calculate the monthly rate of return. 2. An equity fund has a front end load of 4 % and special fees of 0.5% annually as well as back-end fees that start at 5 % and fall by 1 % for each full year the investor holds the portfolio until the fifth year. Assuming the rate of return on the fund net of operating expenses is 10 % annually, what will be the value of a K10 000 investment in the equity fund shares if the shares are sold after 1 year, 4 years and 10 years?
An investor has $80,000 to invest in Certificates of Deposit (CD) and a mutual fund. The CD yields 7% and the mutual fund yields 8%. The mutual fund requires a minimum investment of $8,000 and the investor requires at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in each to maximize the return? What is the maximum return? Show your work and explanations setting this problem up. Variables should clearly be defined. Show all your work.
FIN Fund has $1,850 million dollars of assets, $250 million of liabilities, and the management team will receive $50 million in salary and administrative fees in the coming year. If FIN Fund has 250,000,000 shares outstanding what is the NAV of its shares? O A. $6.00 O B. $6.40 O C. $5.80 D. $7.40 OE. $6.20
Required information [The following information applies to the questions displayed below.] A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return 15% 9% stock fund (S) Bond fund (B) The correlation between the fund returns is 0.15. Portfolio invested in the stock Portfolio invested in the bond Expected return Standard deviation Required: Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.) % % Standard Deviation 38% 29% 12.42% 21.37%
Required information [The following information applies to the questions displayed below] A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Stock fund (S) Bond fund (8) Expected Return 16% 10% The correlation between the fund returns is 0.10. Standard Deviation 32% 23% Required: What is the Sharpe ratio of the best feasible CAL? (Do not round intermediate calculations. Round your answer to 4 decimal places.) Sharpe ratio
Explain clearly.

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