Question: Consider a hedge fund with the following fee structure: The annual fee consists of a fixed fee of 1% of assets under management and an

Consider a hedge fund with the following fee structure: The annual fee consists of a fixed fee of 1% of assets under management and an incentive fee with a high water mark provision of 20%, with a high water mark of 1,000,000, which was also the fund's net asset value in 2010.

The hedge fund's performance is:

Net asset value of the fund:

2010: 1,000,000

2011: 900,000

2012: 1,100,000

2013: 1,250,000

What fees will investors have to pay for their investment in 2011, 2012, and 2013?

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