You invested $1,100,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water mark provision. Suppose the first year the fund manager loses 7 percent and the second year she gains 19 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year. What are the management and performance fees paid each year? Note: Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places. Management fees Performance fees Year 1 Year 2

Suppose you have recently accepted a new job and are setting up your retirement allocations within the firm's 401k plan. The plan options contain two risky mutual funds, A and B. You may assume that all fees are the same across the two funds. Fund A has an expected return of 6% and the standard deviation of returns is 12%. Fund B has an expected return of 7% and the standard deviation of returns is 15%. The correlation between returns on the two funds is 0. The plan also contains a Treasury fund which provides a risk-free return of 3%.   A Suppose you can only invest in one of the two risky mutual funds (A or B), but can combine it with the Treasury fund in any proportions you wish. Which of the two mutual funds would you choose and why   B Maintaining the restrictions on your investment choices from the last question, what is the best expected return you could achieve if you set up a portfolio with a standard deviation of returns equal to 10%? (Please express your answer in percentage…

You invest $100,000 in a hedge fund with a 2/20 fee structure. For the next 3 years, the hedge fund earns annual returns of 24.64%, -11.2%, and 62.02%. You make no withdrawals from the fund. Whenever fees are due, you write a check for that amount to the fund (such that the fund doesn't deduct the fees from your portfolio value). The fund's fee structure has a high watermark feature. What are the total fees you pay over the course of the three years? Enter a number with two decimal points. Answer the question in dollar amount, i.e., if the answer is $20, enter 20.00.

Suppose a (very skilled) fund manager earns a safe return of .70% per trading day. There are 252 trading days per year. (a) What will be your annualized holding period return on $100 invested in the fundif the manager allows you to reinvest in her fund the .70% you earn each day? (b) What will be your annualized holding period return assuming the manager putsall of your daily earnings into a zero-interest-bearing checking account and paysyou everything earned at the end of the year?