A Major Function of Incentive Payments, Guarantees, and Signals Is

question 225

Multiple Choice

A major function of incentive payments, guarantees, and signals is to enable markets to overcome the problem of

• A) irrational forecasting.
• B) efficient forecasting.
• C) private information.
• D) public information.

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Definitions:

Hedge Fund Fees

The charges that hedge funds impose on their investors, typically comprising a management fee and a performance fee.

Carry

In finance, the cost or benefit associated with holding a financial position, such as the interest expense on borrowed funds or the yield earned on deposits.

AUM

Assets Under Management, representing the total market value of the investments a financial institution manages on behalf of clients.

Hedge Fund Fees

Charges associated with investing in a hedge fund, often including a management fee and a performance fee.