A hedge fund has $100m AUM (assets under management) with a high-water mark clause and performance fees that are paid quarterly. In Q1 the fund is worth 90m, and in Q2 the fund is worth 105m. Finally, in Q3, the fund is worth 104m. Which of the following statements is correct?

(a) The hedge fund will not charge a performance fee in Q2.

(b) The hedge fund will charge a performance fee in Q3.

(c) The high-water mark is 104m in Q3.

(d) The high-water mark is $100m in Q1.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct statement is c The hig... View the full answer