Sy fund has the following fee structure:

• 1% management fee based on beginning balance of assets under management for the year
• 10% incentive fee with a 5% hard hurdle rate calculated on gains net of management fees using a highwater mark
• The hedge fund started the year with a beginning balance of $2 billion, which is the highest value the fund has ever accumulated. The ending values before fees are $1.8 billion and $2.1 billion for years 1 and 2, respectively.
• What is the net return to the investor in year 2?

Group of answer choices

11%

15.78%

16.98%