Which of the Following Best Describes the 2/20 Fee That

question 74

Multiple Choice

Which of the following best describes the 2/20 fee that is used by most hedge funds?

• A)The fund pays a 2% management fee and gives 20% of the profits to the investor.
• B)The fund pays a 2% management fee and keeps 20% of the profits.
• C)The investor pays a 2% management fee and receives 20% of the profits.
• D)The investor pays a 20% management fee and receives 80% of the profits.
• E)The investor pays a 2% management fee and gives 20% of the profits to the fund manager.

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Definitions:

Metabolic Rates

The rate at which the body burns calories to sustain basic life functions.

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A fear of anything new, including new experiences, foods, or situations.

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The weight range in which your body is programmed to function optimally and tends to maintain through regulatory mechanisms.

Social Facilitation

The tendency for people to perform differently, usually better, when in the presence of others.