Question

At the start of the year, the value of assets managed by the QQ Hedge Fund...

At the start of the year, the value of assets managed by the QQ Hedge Fund was $100 million. Over the year, the fund earned a gross return of 15% compared with the market index return of 9%. The fund manager charges a management fee of 1.5% of the asset value at commencement, and a performance fee of 20% above the market benchmark. Calculate the following information:

  1. The management fee is $__________ million.
  2. Excess dollar return above the market is $__________ million.
  3. Performance fee is $__________ million.
  4. Total fees earned by the manager over the year are $__________ million.
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