What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Alternative Investments
Fees and Returns practice questions
Fees and Returns is part of CFA Level I Alternative Investments. Alternative Investments questions emphasize private capital, real estate, infrastructure, natural resources, hedge funds, digital assets, and performance measurement. Use this page to review the controlling ideas, then work through 1 question with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Alternative Investments
Fees and Returns
A hedge fund begins the year with NAV of USD100 million. The high-water mark is USD112 million. The fund ends the year before fees at USD116 million. Management fee is 2% of beginning NAV, and incentive fee is 20% of gains above the high-water mark, calculated after the management fee is separately charged. The investor's net return is closest to:
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