- CFA Exams
- CFA Level I Exam
- Topic 8. Alternative Investments
- Learning Module 1. Alternative Investment Features, Methods, and Structures
- Subject 3. Investment and Compensation Structures
CFA Practice Question
Assume a "2 and 20" compensation structure with 8% hurdle rate without any catch-up clause. The partnership has earned a 12% profit. How much can the GP get? A. 2.4%
B. 1.8%
C. 0.8%
Correct Answer: C
The LPs get the first 8%, and they share the remaining 4% 20/80 with the GP. The GP gets 20% x 4% = 0.8%.
User Contributed Comments 0
You need to log in first to add your comment.