Consider a Hedge Fund with $250 Million in Assets at the Start

question 31

Multiple Choice

Consider a hedge fund with $250 million in assets at the start of the year.If the gross return on assets is 18% and the total expense ratio is 2.5% of the year end value,what is the rate of return on the fund?

• A) 15.05%
• B) 15.50%
• C) 17.25%
• D) 18.00%

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Definitions:

Exercise Price

The price at which the holder of an option can buy (for a call option) or sell (for a put option) the underlying security or commodity.

Equity Instruments

Financial instruments that signify an ownership interest in an entity, such as stocks or share options.

Reload Features

Options or clauses in certain agreements that allow for the automatic renewal or extension under specific conditions.

Initial Options

The first set of choices or decisions available in a particular situation or as part of a negotiated agreement.