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A large US hedge fund has a value of $100 million at the beginning of the year. The fund charges a 2% management fee

A large US hedge fund has a value of $100 million at the beginning of the year. The fund charges a 2% management fee based on assets under management at the beginning of the year and a 20% incentive fee with a 10% hurdle rate. Incentive fees are calculated net of management fees. The value at the end of the year before fees is $112 million. Calculate the net return to investors. (b) (3 marks) What are the key characteristics that define event driven strategies? (c) (3 marks) Comment on the following statement, "All hedge funds are risky and volatile -- they all place large directional bets on securities and commodities, while using lots of leverage".

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The management fee charged at the beginning of the year is 2 of 100 million which is 2 million The hurdle rate is 10 which means that the fund needs t... blur-text-image

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