Which of the Following Is Correct Regarding the Compensation Paid

question 42

Multiple Choice

Which of the following is correct regarding the compensation paid to private equity fund managers?

• A)Managers typically receive 20% of fund profits but no separate management fee.
• B)Managers typically receive a high percentage management fee but no portion of fund profits.
• C)Management compensation is usually subject to a "clawback" provision to limit the performance fees.
• D)"Carried interest" refers to the interest fund managers earn on performance fees.
• E)Fees paid to fund managers do not reduce the net return of the fund.