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5. Suppose a hedge fund manager earns 1% per trading day. There are 250 trading per year. Answer the following questions: (a) What will be

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5. Suppose a hedge fund manager earns 1% per trading day. There are 250 trading per year. Answer the following questions: (a) What will be your annual return on $100 invested in her fund if she allows you reinvest in her fund the 1% you earn each day? (b) What will be your annual return assuming she puts all of your daily earnings inta a zero-interest. bearing checking account and pays you everything earned at the end of the year? (c) Can you summarize when it is proper to "annualize" using APR (annual percentage rate) versus EAR (effective annual rate)

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