Check my work You invested $1,400,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water mark provision. Suppose the first year the fund manager loses 8 percent and the second year she gains 14 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year. What are the management and performance fees paid each year? Note: Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places. Management fees Performance fees Year 1 Year 2

Check my work You invested $1,400,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water mark provision. Suppose the first year the fund manager loses 8 percent and the second year she gains 14 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year. What are the management and performance fees paid each year? Note: Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places. Management fees Performance fees Year 1 Year 2

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter2: Descriptive Statistics

Section: Chapter Questions

Problem 17P: Suppose that you initially invested 10,000 in the Stivers mutual fund and 5,000 in the Trippi mutual...

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You invest $100,000 in a hedge fund with a 2/20 fee structure. For the next 3 years, the hedge fund earns annual returns of 25.93%, -10.62%, and 64.83%. You make no withdrawals from the fund. Whenever fees are due, you write a check for that amount to the fund (such that the fund doesn't deduct the fees from your portfolio value). The fund's fee structure has a high watermark feature. What are the total fees you pay over the course of the three years? Enter a number with two decimal points. Answer the question in dollar amount, i.e., if the answer is $20, enter 20.00.
Suppose a (very skilled) fund manager earns a safe return of .70% per trading day. There are 252 trading days per year. (a) What will be your annualized holding period return on $100 invested in the fundif the manager allows you to reinvest in her fund the .70% you earn each day? (b) What will be your annualized holding period return assuming the manager putsall of your daily earnings into a zero-interest-bearing checking account and paysyou everything earned at the end of the year?
Suppose that at the beginning of 2004 you invested $l0,000 in the Stivers mutual fund and $5000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Which mutual fund performed better? Year Stivers Trippi 2004 11,000 5,600 2005 12,000 6,300 2006 13,000 6,900 2007 14,000 7,600 2008 15,000 8,500 2009 16,000 9,200 2010 17,000 9,900 2011 18,000 10,600
A fund starts the year with NAV 54 per share. Over the year, the fund pays out income of 3.25 per share and capital gains distributions of 3.75 per share. Assets in the portfolio grew (shrank) by 0.01, and an expense ratio of 0.016 is charged at the end of the year. What is the rate of return on the fund? (Hint: calculate NAV1 first) O 0.0953 O 0.1110 O 0.1169 O 0.1055 0.1235
You have made a $400,000 investment in a hedge fund that has a 2/20 fee structure. The fund has a total of $25 million of assets under management and provides a return of 10% in the first year. Assume that management fees are paid at the beginning of each year and performance fees are paid at the end of each year in which they are applicable. How much will you pay in management and performance fees for the year? Multiple Choice $1,000; $10,250 $1,000; $10,700 $8,000; $10,250 $8,000; $6,240 $6,240; $9,000
Suppose that a mutual fund agent approaches you and promote a fund which allows you to withdraw money from your Employment Provident Fund (EPF) to invest. From the analysis of the agent, the fund expected to pay up to 11% return, and you know that EPF paid an average 6% return and treasury’s return fixed at 2.75%. Based on the discussion in this chapter and in your opinion, are you going to take the investment? Justify your answer
You invested $90,000 in a mutual fund at the beginning of the year when the NAV was $54.3. At the end of the year, the fund paid $.40 in short-term distributions and $.57 in long-term distributions. If the NAV of the fund at the end of the year was $63.94, what was your return for the year? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Suppose a hedge fund manager earns 1% per trading day. There are 250 trading days per year. Answer the following questions: a. What will be your annual return on $100 invested in her fund if they allow you to reinvest in their fund the 1% you earn each day? b. What will be your annual return assuming they put all of your daily earnings into a zero-interest- bearing checking account and pays you everything earned at the end of the year? Please answer correctly, and provide the work and a slight explanation alongside, thank you its appreciated
Suppose you have recently accepted a new job and are setting up your retirement allocations within the firm's 401k plan. The plan options contain two risky mutual funds, A and B. You may assume that all fees are the same across the two funds. Fund A has an expected return of 6% and the standard deviation of returns is 12%. Fund B has an expected return of 7% and the standard deviation of returns is 15%. The correlation between returns on the two funds is 0. The plan also contains a Treasury fund which provides a risk-free return of 3%. A Suppose you can only invest in one of the two risky mutual funds (A or B), but can combine it with the Treasury fund in any proportions you wish. Which of the two mutual funds would you choose and why B Maintaining the restrictions on your investment choices from the last question, what is the best expected return you could achieve if you set up a portfolio with a standard deviation of returns equal to 10%? (Please express your answer in percentage…
An investor is considering two mutual funds. Fund A has a 5.75 percent front-end load and a 1.25 percent expense ratio. Fund B is no-load but has a 2.25 percent expense ratio. If the investor plans on being in either fund for six years, which should they choose given that they have $16,000 to invest and both funds have gross returns of 12 percent per year? Fees are applied at each year-end to year-end asset values, but the load is taken out up front only once.
Suppose Majtrk has a front-end load fee of 9%. If you purchase 100 shares of this fund at the NAV, you will pay a commission of S in one month, you sell the shares, you pay a redemption fee at that time. If you are interested only in funds without any fee, you the quotations as listed in the table, it is 11, to use additional online resources to find no-load funds, because using only to determine the amount of any front-end load fee that the fund may charge.
Judah invests $7 million in a hedge fund with a 2/20 fee structure. The fund has a total of $93 million of assets under management and the return in the first year is 22%. Assume that management fees are paid at the beginning of each year and performance fees are paid at the end of each year in which they are applicable. What is the amount of the performance fee that Mr. Dowdy will pay in the first year? O $276,300 O $273,840 O $1,369,200 O $283,900 O $300,000