CFA Level I Alternative Investment Performance and Returns question

Alternative Investment Performance and Returns sample question

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Alternative Investments

Alternative Investment Performance and Returns

Two years ago, Tarn River Fund reached its high-water mark of USD120 million. Last year the fund declined to a net asset value of USD105 million and paid no incentive fee. This year the fund ends at USD126 million before fees. The fund charges a 1.5% management fee on beginning NAV, and a 20% incentive fee applies to gains, measured after deducting the management fee, above the greater of the high-water mark and an 8% hard hurdle level computed on beginning NAV. This year's investor net return is closest to: