Question
A hedge fund charges an incentive fee of 20% of any investment returns above the T-bill rate, which currently is 2%. In the first year,
A hedge fund charges an incentive fee of 20% of any investment returns above the T-bill rate, which currently is 2%. In the first year, the fund suffers a loss of 8%. What rate of return must it earn in the second year to be eligible for an incentive fee?
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American Public School Finance
Authors: William A. Owings, Leslie S. Kaplan
3rd Edition
113849996X, 978-1138499966
