Business, 06.05.2021 18:20 ericasolis2614

Here are data on three hedge funds. Each fund charges its investors an incentive fee of 20% of total returns. Suppose initially that a fund of funds (FF) manager buys equal amounts of each of these funds, and also charges its investors a 20% incentive fee. For simplicity, assume also that management fees other than incentive fees are zero for all funds. Hedge Fund 1 Hedge Fund 2 Hedge Fund 3 Start of year value (millions) $ 100 $ 100 $ 100 Gross portfolio rate of return 20 % 10 % 30 % a. Compute the rate of return after incentive fees to an investor in the fund of funds. (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

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Here are data on three hedge funds. Each fund charges its investors an incentive fee of 20% of total...

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