Which clause helps investors avoid paying the performance fee for the same part of return twice after a previous loss?

A. high-water mark
B. clawback
C. hurdle rate

Correct Answer: A

A high-water mark is the minimum level that a fund manager needs to achieve to receive a performance bonus. The high-water mark clause protects investors by avoiding paying the performance fee for the same part of return when an investment fund or account recovers from the previous loss.

The hurdle rate avoids performance bonus payments for an unsatisfactory rate of return.