EBK INVESTMENTS
EBK INVESTMENTS
11th Edition
ISBN: 9781259357480
Author: Bodie
Publisher: MCGRAW HILL BOOK COMPANY
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 26, Problem 9PS
Summary Introduction

(a)

To calculate:

The total fees, both in dollars and percents for portfolio return of 5% for a hedge fund which has assets of $1 billion and charges fees of management at 2% and an incentive fees over the market rate at 20% . The current market rate is 5% .

Introduction:

The total fees is a sum total of management fees and incentive fees and when it is divided by the asset value then the outcome is the total fees in terms of percentage.

Summary Introduction

(b)

To calculate:

The total fees, both in dollars and percents for portfolio return of 0% for a hedge fund which has assets of $1 billion and charges fees of management at 2% and an incentive fees over the market rate at 20% . The current market rate is 5% .

Introduction:

The total fees is a sum total of management fees and incentive fees and when it is divided by the asset value then the outcome is the total fees in terms of percentage.

Summary Introduction

(c)

To calculate:

The total fees, both in dollars and percents for portfolio return of 5% for a hedge fund which has assets of $1 billion and charges fees of management at 2% and an incentive fees over the market rate at 20% . The current market rate is 5% .

Introduction:

The total fees is a sum total of management fees and incentive fees and when it is divided by the asset value then the outcome is the total fees in terms of percentage.

Summary Introduction

(d)

To calculate:

The total fees, both in dollars and percents for portfolio return of 10% for a hedge fund which has assets of $1 billion and charges fees of management at 2% and an incentive fees over the market rate at 20% . The current market rate is 5% .

Introduction:

The total fees is a sum total of management fees and incentive fees and when it is divided by the asset value then the outcome is the total fees in terms of percentage.

Blurred answer
Students have asked these similar questions
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. 0c. 5%d. 10%
A hedge fund charges a management fee of 3 percent and an incentive fee of 25 percent for all returns over a benchmark return of 4%. The risk-free rate is 2% and the standard deviation of the funds continuously compounded returns has been 23%. The current net asset value is $55 per share. What is the value of all fees expressed as a percent at the start of the investment period?
Harlequin Capital is a hedge fund with $250 million of initial capital. Harlequin charges a 2% management fee based on assets under management at year end, and a 20% incentive fee based on returns in excess of an 8% hurdle rate. In its first year, Harlequin appreciates 16%. Assume management fees are calculated using end-of-period valuation.   Calculate the investor’s net return assuming the performance fee is calculated net of the management fee.
Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Portfolio Management; Author: DevTechFinance;https://www.youtube.com/watch?v=Qmw15cG2Mv4;License: Standard YouTube License, CC-BY