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:

Traceable Fixed Expense

Fixed costs that can be directly linked to a specific business segment and would disappear if the segment was discontinued.

Price Reduction

The act of lowering the selling price of goods or services, often to stimulate demand, clear out inventory, or respond to market competition.

Target Costing

A pricing method that involves determining the desired cost for a product to ensure profitability at its anticipated selling price.

Desired Return

The profit or return that an investor or company aims to achieve on an investment or project.