A Hedge Fund Sets Its Fee at 2% and a 20

question 22

Multiple Choice

A hedge fund sets its fee at 2% and a 20% carry with an 8% benchmark. How much money will a hedge fun make in fees over the course of a year if AUM started at $4,000,000 and ended the year at 5,300,000?

• A) $68,300
• B) $302,000
• C) $80,400
• D) $92,040

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Definitions:

Separation Threshold

The minimum distance or difference between stimuli detectable by the sensory system.

Response Threshold

It is the minimal amount of stimulus intensity required for a neuron to fire a response or for a specific response criterion to be met in behavior.

Psychophysics

The scientific study of the relationship between stimuli (which are physical) and the sensations and perceptions they produce in the observer.

Physical Energy

The capacity to perform work or to produce physical changes within the body or environment, stemming from physical or chemical resources.