Question: A hedge fund with a 1 and 15 fee structure has a hard hurdle rate of 7.45%. If the incentive fee and management fee are

A hedge fund with a 1 and 15 fee structure has a hard hurdle rate of 7.45%. If the incentive fee and management fee are calculated independently and the management fee is based on beginning-of-period asset values, an investors net return over a period during which the grows value of the fund has increase 19.45% is closest to

A. 10.85%.

B. 12.65%.

C. 16.65%.

D. 21.74%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The Kramerica Hedge Fund has a 2 and 20 fee structure. There is no hurdle rate, and the funds NAV is $500 million at the beginning of the year and at the end of the year, the funds NAV is $550...

Dena Els works for a large private endowment that recently invested $50M into a global macro hedge fund with the following features: - 2-and-20 fee structure - There is no high water mark provision -...

.Hedge Fund ABC has a 2 and 20 fee arrangement with no hurdle rate and a net asset value (NAV) of $300 million at the start of the year. At the end of the year, before fees, the NAV is $335 million....

A fund of funds divides its money equally between five hedge funds that earn a gross return of -3%, -1%, 5%, 8%, and 10% before fees in a particular year. The fund of funds charges 1% plus 10% and...

A fund of funds divides its money equally between five hedge funds that earn a gross return of 3%, -1%, 5%, 8%, and 10% before fees in a particular year. The fund of funds charges 1% plus 10% and the...

a hedge fund with $100 net asset value per share charges a fee of 2% and an incentive fee of 20% of returns over a money market rate, which is currently 5%. calculate total fees both in dollars and...

** please answer this question only** your aunt decides to invest 10 million into a hedge fund. the fund charges 2% management fee based on assets under management at year end and 15% incentive fee...

" Total Fee p.a. Management Fee Max[0, Incentive Fee (Gross Return above HWM - Hurdle Rate)]) - Consider a Hedge Fund 1.5/30 without a hurdle rate that exhibits a NAV of $200 million (HWM from...

Hedge Fund A holds several long equity positions and an equal dollar amount of offsetting short positions. The fund has a "1.5 and 15" fee structure, for management and performance fees respectively...

Question 2 (10 marks) Read the scenario below and answer the questions that follow: An investor is tracking Company AA listed on Country Zs stock exchange. The company is in the manufacturing sector...

A sewing machine needle moves with a rapid vibratory motion, rather like SHM, as it sews a seam. Suppose the needle moves 8.4 mm from its highest to its lowest position and it makes 24 stitches in...

A defibrillator is used to restart a person's heart after it stops beating. Energy is delivered to the heart by discharging a capacitor through the body tissues near the heart. If the capacitance of...

Discuss how ABC Ltd . should recognize and disclose the deferred tax asset or liability in its financial statements, referring to the relevant IAS ( International Accounting Standard ) and providing...

Which of the following is NOT a type of defect? A . A product is designed incorrectly. B . A product is not labeled with proper warnings. C . A product is not safely packaged. D . A product does not...

Scandinavian and North American cultures have very similar cultural contexts, and yet H&M clearly failed to account for cross-cultural communications in their hoodie campaign for the United States....

To what extent has digital technology influenced the way Oprah communicates and interacts with her audience?

Describe the barriers in the H&M case that led to this failure to communicate.