A hedge fund manager managing $100 million with a 2/20 fee structure with no high water...
A hedge fund manager managing $100 million with a 2/20 fee structure with no high water mark feature has a pre-fee return of 7% next year. What does the manager get paid?
Homework Answers
Manager fee = 2%*100m + 20%*7%*100m
= 2m+ 1.4 m
=$3.4 million
2/20 fee structure implies that 2% of funds under management will be paid to managers irrespective of performance. 20% is paid on the fund profits.
Add Answer to:
A hedge fund manager managing $100 million with a 2/20 fee structure with no high water...
For example, imagine a hedge fund managing $200 million with a 2% management fee and a 20% performance fee benchmarked t...
For example, imagine a hedge fund managing $200 million with a 2% management fee and a 20% performance fee benchmarked to the S&P 500 total return. If the fund earns a 6.5% return in a year when then S&P 500 total return was 7%, what is the after-fee return for investors? How much does the fund make in fees (dollar amount)?
For example, imagine a hedge fund managing $200 million with a 2% management fee and a...
For example, imagine a hedge fund managing $200 million with a 2% management fee and a 20% performance fee benchmarked to the S&P 500 total return. If the fund earns a 12% return in a year when then S&P 500 total return was 7%, what is the after-fee return for investors? How much does the fund make in fees (dollar amount)?
You invested $1,200,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the...
You invested $1,200,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water-mark provision. Suppose the first year the fund manager loses 8 percent, and the second year she gains 16 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year. What are the management and performance fees paid each year? (Leave no cells blank - be certain to...
You invested $1,300,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the...
You invested $1,300,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water-mark provision. Suppose the first year the fund manager loses 5 percent and the second year she gains 17 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year. What are the management and performance fees paid each year? (Leave no cells blank - be certain to enter...
A hedge fund charges an incentive fee of 15% of any investment returns above the T-bill...
A hedge fund charges an incentive fee of 15% of any investment returns above the T-bill rate, which currently is 3.0% but is subject to a high water mark. In the first year, the fund suffers a loss of 7.2%. What rate of return must it earn in the second year to be eligible for an incentive fee? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund...
Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 10.00% and the risk-free rate is 5.00%. What rate of return should investors expect (and require) on this fund? Stock Amount Beta A $1,075,000 1.20 B 675,000 0.50 C 750,000 1.40 D 500,000 0.75 $3,000,000 1. 10.56% 2. 10.08% 3. 10.83% 4. 11.67% 5. 11.38%
assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund...
assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 2.00%, What rate of return should investors expect and require) on this fund? Do not round your intermediate calculations. Stock Amount Beta $525.000 5675,000 0.50 $1.300.000 1.40 5500,000 0.75 $3,000,000 10.68% 9.88% 13.67% 11.49% provirus
1. Bayes’ rule Consider a manager of an event-driven hedge fund. This type of hedge fund...
1. Bayes’ rule Consider a manager of an event-driven hedge fund. This type of hedge fund strategy is focused on investing in financial instruments of companies undergoing some event, for example, bankruptcy. Suppose that the goal of the manager is to identify companies that may become acquisition targets for other companies. The manager is aware of some empirical evidence that companies with a very high value of a particular indicator-the ratio of stock prices to free cash flow per share...
A mutual fund manager anticipates shareholder redemptions of about $32 million per quarter as the market...
A mutual fund manager anticipates shareholder redemptions of about $32 million per quarter as the market continues its slump over the next six months. She would like to hedge the future sale of stocks from the portfolio necessary to meet the redemptions, while maintaining the current characteristics of the fund. The portfolio is primarily composed of large-cap technology stocks. It has a high correlation with the Nasdaq 100 index, and the portfolio has a beta of 0.9 with this index....
Asume that you are the portfolio manager of the SF Find, 3 million hedge fund that...
Asume that you are the portfolio manager of the SF Find, 3 million hedge fund that untains the following stocks. The resindate ofretum on the market is 1100 und the risk-free rate is 5.00 Watterturm investos expect and require on this fund? Stock Amount $1,075,000 675,000 750,000 500.000 $3.000.000 1.20 0.50 1.40 0.75 10.5096 TO e 1 9.II 1.50. g (which is constant)- 6.5%, and o capital gains yield for the coming year? u t the stock's expected 6.50 b683...
assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 2.00%, What rate of return should investors expect and require) on this fund? Do not round your intermediate calculations. Stock Amount Beta $525.000 5675,000 0.50 $1.300.000 1.40 5500,000 0.75 $3,000,000 10.68% 9.88% 13.67% 11.49% provirus
Asume that you are the portfolio manager of the SF Find, 3 million hedge fund that untains the following stocks. The resindate ofretum on the market is 1100 und the risk-free rate is 5.00 Watterturm investos expect and require on this fund? Stock Amount $1,075,000 675,000 750,000 500.000 $3.000.000 1.20 0.50 1.40 0.75 10.5096 TO e 1 9.II 1.50. g (which is constant)- 6.5%, and o capital gains yield for the coming year? u t the stock's expected 6.50 b683...
Most questions answered within 3 hours.
-
In Netherland Dwarf rabbits, dwarf size is determined by allele
N, and normal-size by allele n....
asked 2 minutes ago -
During Heaton Company’s first two years of operations, it
reported absorption costing net operating income as...
asked 17 minutes ago -
Consider testing the
hypotheses:
H0: p = 0.56
H1: p > 0.56
where p is
the...
asked 20 minutes ago -
In a two-factor analysis of variance a main effect is defined as
____.
a. the unique...
asked 27 minutes ago -
A bank's loan officer rates applicants for credit. The ratings
are normally distributed with a mean...
asked 28 minutes ago -
Fill in the following information for Adipic Acid: molecular
weight, g or ml, mole, melting point,...
asked 33 minutes ago -
how
to use a for loop to iterate over the string below and print each
character...
asked 35 minutes ago -
Please type answer, Thanks.
Respond to the following in a minimum of 175
words:
Research industry...
asked 35 minutes ago -
Assume that all interest rates in the economy increase from 9
percent to 10 percent. Which...
asked 45 minutes ago -
Describe the function of a Change Control Board.
When calculating Planned Value (PV), what is the...
asked 50 minutes ago -
The customer help center in your company receives calls from
customers who need help with some...
asked 1 hour ago -
A manufacturer wished to compare the wearing qualities of two
different types of automobile tires, A...
asked 1 hour ago