Find how much money will the manager earn

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Problem 1: A $20 million investment is made in year 1 and the fund increases by 30%. Based on a 10% incentive fee, how much money will the manager earn?

A) $2 million

B) $2.6 million

C) $0.6 million

D) $1 million

Problem 2: Aggressive bond investors are more focused on the capital gains that arise from a change in interest rates. If rates are expected to fall, the short-term speculator can buy ____ and ____ issues to achieve maximum returns if the interest rate forecast is correct.

A) Short-term; low-coupon

B) Long-term; high-coupon

C) Short-term; high-coupon

D) Long-term; low-coupon

Reference no: EM132761590

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