Quiz Ch 20 – Hedge Fund Manager Compensation
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
How do hedge fund managers primarily receive compensation?
How do hedge fund managers primarily receive compensation?
How can the hedge fund manager’s incentive fee, which is 20% of profits beyond the risk-free benchmark, be likened to receiving call options in terms of quantity and exercise price?
What is the term used to describe the practice of hedge funds including past returns of only successful funds to attract new clients?
As per Agarwal, Daniel, and Naik’s 2011 study, hedge funds commonly exhibit varied average returns in which month compared to their average returns in other months?
What approach could a hedge fund adopt to capitalize on positive alpha in a long equity position?
How are hedge funds commonly structured?
How is hedging a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per quarter using 3-month S&P 500 future contracts ($250 multiplier) characterized?
Which strategy represents a neutral pure play?
What types of portfolios are typically affected by lock-up restrictions in Aragon’s (2007) research?
What statement about long-short hedge funds would become invalid if government regulations prohibited short selling?