(A) In year 1, a fund increases from $179m to $194m (gross asset value), the fund has a 3/15 structure with a hurdle rate of 5.5%, how much are the performance fees for this year, assuming they are charged after management fees are first deducted from the gross asset value? (a) $0.1217m (b) $0.09975m (c) 0.065m (d) there was no performance fee this year

(B) if a hedge fund manager generated $300,000 net profit (which includes the lending fee), what was the returned achieved - the manager took a short position worth $5 million and a long position worth $5. Company A has an initiated position of $2.50, closed position of $2.32, Annual stock lending fee of 15bps; Company B has an initiated position of $2.00 and closed position of $2.15. (a) 6% (b) 2.252% (c) 4.5% (d) 3%