A fund of funds divides its money between five hedge funds that earn 5%,

1%, 10%, 15%, and 20% before fees in a particular year. The fund of funds

charges 1 plus 10% and the hedge funds charge 2 plus 20%. The hedge funds

incentive fees are calculated on the return after management fees. The fund

of funds incentive fee is calculated on the net (after management fees and

incentive fees) average return of the hedge funds in which it invests and after

its own management fee has been subtracted. What is the overall return on the

investments? How is it divided between the fund of funds, the hedge funds,

and investors in the fund of funds?