SIE practice questionmediumHedge Funds
A typical hedge fund fee structure is:
- ANo fees whatsoever
- BA management fee plus a performance fee✓ Correct answer
- COnly a back-end redemption fee
- DA flat commission per trade
Explanation
Why B — A management fee plus a performance fee
Hedge funds usually charge both a management fee (e.g., 2%) and a performance fee (e.g., 20%). The other options do not reflect the industry norm.
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