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Question $6$ of $8$

$10$ points

Question $6$

You invested $$1,250,000$ with a market$-$neutral hedge fund manager. The fee structure is $\frac{2}{20},$ and the fund has a high$-$water mark provision. Suppose the first year the fund manager loses $15$ percent and the second year she gains $30$ percent.

What are the management and performance fees paid in Year $2?$ Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year.