Which of the Following Is Correct Regarding the Compensation Paid

question 56

Multiple Choice

Which of the following is correct regarding the compensation paid to private equity fund managers?

• A)Managers typically receive 20 percent of fund profits but no separate management fee.
• B)Managers typically receive a high percentage management fee but no portion of fund profits.
• C)Management compensation is usually subject to a clawback provision to limit the performance fees.
• D)"Carried interest" refers to the interest fund managers earn on performance fees.
• E)Fees paid to fund managers do not reduce the net return of the fund.

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Definitions:

Stabilization Policy

A government strategy aimed at managing economic cycles by adjusting fiscal policy or monetary policy to stabilize the economy.

Aggregate Demand

Aggregate demand is the total demand for all goods and services in an economy at a given overall price level and in a given time period.

Active Stabilization Policy

Government policies aimed at reducing economic fluctuations through fiscal and monetary actions.

Fiscal Policy

Government policies related to taxation and spending that aim to influence economic conditions.