Part $1.$ There are six $(6)$ questions in this part. You MUST answer question $1,$ and ANY

four $(4)$ questions from $2-6.$ Show your work to secure full credit.

$(20$ points$)$

Tom Lohrmann and his wife, Suzanne Lohrmann, are planning for retirement and want to

compare the past performance of a few hedge funds they are considering for investment.

They believe that a comparison over a five$-$year period would be appropriate. They are

given the following information about the Rhein Valley Superior Fund that they are

considering.

The Fund charges a modest $6\%$ management fee based on the value of assets at the beginning of

the year plus $20\%$ on realized and$/$or unrealized capital gain during the year. No incentive fees

for years that the fund loses money, of course.

a$.$ Compute the Funds Net Return in $\%$ for years $1$ and $2.$

b$.$ Compute the gross total holding period return for the five$-$year period.