What Is the "High Water Mark" for a Hedge Fund

question 23

Multiple Choice

What is the "high water mark" for a hedge fund manager to receive the portion of their fee based on performance?

• A) The percentage by which the fund outperforms the Dow Jones Industrial Average.
• B) The highest previous value of the fund.
• C) The percentage ranking versus other fund managers that a hedge fund manager must achieve.
• D) The legal limit that a fund manager can charge for a performance based fee.
• E) The percentage return of the fund in the previous year.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a specific period accounting for changes in price level.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports, resulting in a net outflow of domestic currency to foreign markets.

Real GDP

Gross Domestic Product adjusted for inflation, which reflects the value of all goods and services produced by an economy in a given year in base-year prices.

Price Level

The average price point of the entirety of goods and services in the economic scope.