b. You are given the following information for a hedge fund with high watermark requirement and a fee structure of 1 and 20. Based on the available information, please complete the following parts.

i. Calculate the return for each year and also decide the high watermark;

ii. Calculate the management fee in dollars, assume it is 1%;

iii. Calculate the incentive fee net of management fee in dollars;

iv. Lastly calculate the net returns to the investors.

	Year 1	Year 2	Year 3	Year 4
Initial Value	300,000	285,000	325,000	290,000
Ending Value	285,000	325,000	290,000	322,000
Return
High Watermark
Hurdle rate	10%	10%	10%	10%
Management fee ($)
Incentive fee net of management fee ($)
Net returns to investors