Q1. What is the standard hedge fund (HF) compensation structure and how do high watermark provision benefit or impose costs on HF investors?

Q2. Suppose you have been assigned the task of assessing equity market efficiency. What are the minimum requirements for an efficient market, and (2) how would the degree of market efficiency influence your decision to adopt an active fund management investment strategy?

Q3. What two factors determine the liquidity of an asset class or individual security?

Q4. Should investors consider satisfying their liquidity needs ONLY from the distributions (Cash flows) of their investment portfolio? Please discuss arguments for and against doing so.

Q5. Under what market conditions will the weighting of a fundamental and cap-weighting index be identical and why?