Chapter 20, Problem 3PS

Summary Introduction

To determine:

The return of hedge fund for the second year which makes it eligible for earning incentive fees of $20\%$ which is given on returns above the T—bill rate which is currently at $2\%$ .

Introduction:

The hedge fund is that type kind of fund in which there is no interference of government and law. This fund is a private pool fund which made from taking money from the big investors & close people and invests them in different kinds of securities.