CFA Practice Question

There are 139 practice questions for this study session.

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?

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
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