The Previous Value of a Portfolio That Must Be Reattained

question 49

Multiple Choice

The previous value of a portfolio that must be reattained before a hedge fund can charge incentive fees is known as a

• A) benchmark.
• B) water stain.
• C) water mark.
• D) high water mark.
• E) low water mark.

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Definitions:

Equilibrium

A state of physical balance or a stable situation in which all forces are equal.

Two-Point Threshold

The minimum distance at which two points of contact can be felt as two distinct stimuli.

Gestalt

A concept in psychology that emphasizes the idea that the whole of anything is greater than its parts, focusing on patterns and configurations in perceiving objects.

Psychoanalysis

A therapeutic approach and theory of personality developed by Sigmund Freud that emphasizes unconscious motivations and conflicts.