Quiz Ch 20 – Hedge Fund Manager Incentive Fee Equivalency

Essentials of Investments

Bodie, Kane, and Marcus

12th Edition

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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?

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  • Search Terms: % ( + __________ __________. a) .; and asset benchmark, beyond call(s) equals equivalent exercise fee fund fund's hedge if incentive interest is manager net of portfolio's price profit rate receiving rf rf) rf) c) .; risk-free s s b) ; s d) .; s, that, the to value with ×
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