• Here it is assumed that there is no hurdle rate and there are no subscriptions or redemptions. In addition, it is assumed that management fees are calculated based on beginning-of-year net asset value (NAVo). which is $160,000,000. Then if the ending after-fee NAV is $180,000,000, what were the incentive fees in dollars if the incentive fee is 15% and the management fee is 2%* 1. $3,800,000 2. $4,217,359 3. $3,529,412 4. $3,000,000 A stock price records the following 10 consecutive daily prices corresponding to days —10 to —1: $50, $49, $49, $48, $50, $52, $50, $49, $46, and $45. What are the simple (arithmetic) moving average prices on day 0 (using 3-day and 10-day moving averages), as well as the 3-day moving average for days —2 and — 1? 

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  • 1. They are: $46.67, $48.33,$50.33, and $48.80,respectively.
  • 2. They are:$46.67, $50.33, $48.80,and $46.33, respectively.
  • 3. They are:$46.67, $48.80, $50.33 and $48.33, respectively.
  • 4. They are: $50.33, $48.80, $46.33 and $48.33, respectively.
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  • A Corp. has offered to purchase TARG Corp. for $45 per share. Immediately before the merger proposal announcement, TARG was trading at $30 per share. Immediately after the announcement, TARG is trading at $38.50 per share. Assuming that the share price of TARG would fall back to $30 if the deal fails and that the riskless interest rate is 0%, a long position in TARG taken by an event-driven hedge fund can be replicated using a combination of positions in a risk-free bond and a binary put option.
  • What is the cost of the binary put option? 1. $7.50 2. $15.00 3. $6.50 4. $8.50 A stock price records the following 10 consecutive daily prices corresponding to days —10 to —1: $50, $49, $49, $48, $50, $52, $50, $49, $46, and $45.
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  • Assuming you don't already have a position on day -1 and using a classic interpretation of a simple moving3-day average trading system, what position should have been established on the day —1?
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  • 1. A long and a short position should have been established simultaneously on that day.
  • 2. No position should have been established on that day.
  • 3. A long position should have been established on that day.
  • 4. A short position should have been established on that day.
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  • Here it is assumed there are no hurdle rates, subscriptions, or redemptions. In addition, it is assumed that management fees are calculated using the beginning-of-year net asset value (NAVO), which is $150 million. Then if the ending (one year later) before-fee NAV is $172.5million, what is the annual management fee and incentive fee in dollars for a 2 and 20 arrangement?
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  • What is the ending NAV after fees? 1. Management fee: $3 million; incentive fee: $4.5 million; ending Nov after fees:$165.0 million. 2. Management fee: $3.45 million; incentive fee:$2.91million; ending NAV after fees: $164.55 million. 3. Management fee: $3 million; incentive fee: $3.9 million; ending NAV after fees: $165.6 million. 4. Management fee: $3.45 million; incentive fee: $4.5 million; ending NAV after fees: $164.55 million.

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