Problem

A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive f...

A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in dollars and as a percent of assets under management, for portfolio returns of:

a. -5%

b. 0

c. 5%

d. 10%

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Solutions For Problems in Chapter 20