Hedge Fund Incentive Fees Are Essentially

question 82

Multiple Choice

Hedge fund incentive fees are essentially

• A) put options on the portfolio with a strike price equal to the current portfolio value
• B) put options on the portfolio with a strike price equal to the expected future portfolio value
• C) call options on the portfolio with a strike price equal to the expected future portfolio value
• D) call options on the portfolio with a strike price equal to the current portfolio value
• E) straddles

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Definitions:

Shareholder Model

A corporate governance model focusing on maximizing shareholder value and prioritizing the interests of shareholders in company decisions.

Stakeholder Model

A governance framework that focuses on balancing the interests of multiple stakeholders in a company, not just shareholders.

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled, focusing on the interests of stakeholders.

Shareholder Models

Corporate governance frameworks that prioritize the interests and returns of shareholders in the operations and decisions of a company.