The fee structure of a hedge fund is "2 and 20." This means:

A. incentive fee from 2% to 20%, depending on the fund performance.
B. 2% management fee and 20% incentive fee.
C. 2% management fee if the profit margin is over 20%.

Correct Answer: B

It refers to how hedge fund managers charge a flat 2% of total asset value as a management fee and an additional 20% of any profits earned.