5-98 What Does a Hurdle Rate Specified by a Hedge

question 54

Multiple Choice

5-98 What does a hurdle rate specified by a hedge fund indicate?

• A)The maximum number of investors possible in the fund that would allow it to avoid regulations.
• B)The minimum amount required to be invested in the fund.
• C)The net worth criterion for an individual to be deemed an "accredited investor."
• D)The highest net asset value that the fund has previously achieved,above which the manager receives a performance fee.
• E)The minimum annualized performance benchmark that must be realized before a performance fee can be assessed.

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Definitions:

POSSLQ

An acronym for "Persons of Opposite Sex Sharing Living Quarters," used in demographic studies to refer to cohabiting couples who are not legally married.

Cohabitation

The state of living together and having a sexual relationship without being married.

Opposite Sex

A term typically used to describe individuals of the gender different from one's own, often in biological or social contexts.

Serial Monogamy

A pattern of engaging in successive monogamous romantic relationships, where an individual has only one partner at a time but multiple partners over their lifetime.