Hedge Fund Managers Are Compensated by ________

question 4

Multiple Choice

Hedge fund managers are compensated by ________.

• A) deducting management fees from fund assets and receiving incentive bonuses for beating index benchmarks
• B) deducting a percentage of any gains in asset value
• C) selling shares in the trust at a premium to the cost of acquiring the underlying assets
• D) charging portfolio turnover fees

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Definitions:

Outside Supplier

An external entity or company that provides goods or services to another company, often part of the supply chain.

Idle Capacity

Unused production capacity, indicating available resources that are not currently being utilized.

Transfer Price

Transfer price refers to the price charged for goods or services transferred between departments or divisions within the same company or between affiliated entities.

Valve Division

A specific business unit within a company that focuses on the production and sale of valves.