Excelsior Management Co., a prominent hedge fund manager pursuing an event-driven strategy, charges a management fee of 1.5% per annum and an incentive fee of 15% on any "net new profits" (i.e., above the previous high water mark) earned by its fund after deducting this management fee. All fees are charged and collected at the end of each year. Over the past three years, the Fund generated the following gross returns (i.e., prior to any fees being charged):

Year 1 --> +20%

Year 2 --> -10%

Year 3 --> +5%

a) Calculate total net return to investors of this fund over this three-year period [Note: you may assume the Fund is at its high water mark at the beginning of this period]. What is the total amount of fees earned by the manager over this period as a percentage of an initial investment at the beginning of Year 1?

b) Calculate the effective annualized net return to investors of this fund over this three-year period.

c) By how much must the Fund appreciate in Year 4 in order to hit its high water mark, which would allow the manager to begin to charge the incentive fee once again?