A hedge fund with $50 000 of assets charges a management fee of 2% and an incentive fee of 20% of return over a money market rate, which is currently 2%. Calculate total fees if the hedge return is 2%.

The current high water mark is $66 and net asset value of a hedge fund is $62. If the Black-Scholes value of a call option is $11.50 and the incentive fee is 20%, then what happen with the value of the incentive fee if the high water mark increases to $68?

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For the first question we need to calculate both the management fee and incentive fee M... View the full answer