Hedge funds managers are compensated by ___________________.

Question

Quizplus · Accepted Answer

Hedge fund managers typically deduct management fees from the fund assets, which is a percentage of the total assets under management, and receive incentive bonuses for outperforming certain index benchmarks. This fee structure aligns the interests of the manager and investors in achieving higher returns. Option B is incorrect because hedge fund managers are not compensated by deducting a percentage of asset value gains. Option C is incorrect because selling shares in the trust at a premium is not a common form of hedge fund manager compensation. Option D is incorrect because portfolio turnover fees are not a primary source of compensation for hedge fund managers.

Hedge Funds Managers Are Compensated by ___________________