- CFA Exams
- CFA Level I Exam
- Topic 8. Alternative Investments
- Learning Module 2. Alternative Investment Performance and Returns
- Subject 2. Calculating Fees and Returns
CFA Practice Question
Continue with the previous question. Now suppose that after year two the investment value is up to $1,200,000. What are the fees charged by the fund?
B. $88,000.
C. $100,400.
A. $64,000.
B. $88,000.
C. $100,400.
Correct Answer: A
The management fee is 2% of $1.2 million, plus the incentive fee of 20% of $0.2 million (1.2 million - 1 million high water mark value).
User Contributed Comments 2
| User | Comment |
|---|---|
| khalifa92 | incentive fee aint net of management fee until its mentioned |
| REllis | There was also no mention of a high water mark value... this question is stupid |