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Question
Consider a hedge fund with $200 million at the start of the year. The benchmark S&P 500 Index was up 16.5% during the same period. The gross return on assets is 21%, and the expense ratio is 2%. For each 1% above the benchmark return, the fund managers receive a .1% incentive bonus.
What was the annual return on this fund?
A. 16.5%
B. 18.04%
C. 18.55%
D. 21%
Answer
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Related questions
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Which of the following does not approximate the performance of a buy-and-hold portfolio strategy?
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C. A value-weighted index
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Q:
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Q:
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Q:
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Q:
A typical hedge fund incentive bonus is usually equal to ________ of investment profits beyond a predetermined benchmark index.
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Q:
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Q:
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Q:
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D. The answer cannot be determined from the information given.