You invested $1,000,000 with a hedge fund that has a standard 2/20 fee structure and a high-water

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You invested $1,000,000 with a hedge fund that has a standard 2/20 fee structure and a high-water mark provision. Suppose the returns over the first two years are −5 percent and 25 percent, respectively. What are the management and performance fees paid each year? Assume the management fees are paid at the beginning of each year and performance fees, when relevant, are paid at the end of each year.

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Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

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