The Previous Value of a Portfolio That Must Be Reattained

question 24

Multiple Choice

The previous value of a portfolio that must be reattained before a hedge fund can charge incentive fees is known as a

• A)benchmark.
• B)water stain.
• C)water mark.
• D)high water mark.

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Definitions:

Value Of A Dollar

The purchasing power of the US dollar, indicating the amount of goods or services one can buy with one dollar at a given time.

Price Remains The Same

A condition where the cost of a good or service does not change over a period of time.

Substitution Bias

Substitution bias occurs in inflation measurement and refers to the tendency of consumers to change their purchasing habits away from goods that have increased in price to cheaper alternatives, which is not always fully captured by price indexes.

CPI

The Consumer Price Index, which measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.