A hedge fund charges an incentive fee of 15% of any investment returns above the T-bill rate,
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Question:
A hedge fund charges an incentive fee of 15% of any investment returns above the T-bill rate, which currently is 3.0% but is subject to a high water mark. In the first year, the fund suffers a loss of 7.2%. What rate of return must it earn in the second year to be eligible for an incentive fee? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Related Book For
Essentials of Investments
ISBN: 978-0077835422
10th edition
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
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