If a Fund Manager Has the Opportunity to Receive a Fee

question 15

Multiple Choice

If a fund manager has the opportunity to receive a fee as an added incentive to enhance the performance of the fund,the amount of the fee may be based on the extent to which the performance of the fund exceeds an agreed upon hurdle rate of return.Such a fee is referred to as a:

• A)Bonus
• B)Hurdle fee
• C)Fiduciary fee
• D)Promote

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Definitions:

Interest Income

Earnings received from deposit accounts or investments that yield interest, such as savings accounts, bonds, or loans.

Accounts Receivable

An asset account that records amounts a company has a right to receive because it has provided goods or services on credit.

Nontrade Receivables

Amounts owed to a company that are not related to the sale of goods or services, such as tax refunds or loans to employees.

Company Officers

Individuals appointed by the board of directors who manage the daily operations of a company, such as the CEO, CFO, and COO.