A hedge fund has $150 million in assets at the beginning of the year and 10 million shares outstanding throughout the year.Throughout the year assets grow at 12%.The fund charges 3% management fee on assets.The fee is imposed on year end asset values.What is the end of year NAV for the fund?

Question

Quizplus · Accepted Answer

The end of year NAV is $16.30. The assets grow to $168 million at the end of the year. The management fee is $5.04 million. The NAV is $162.96 million, or $16.30 per share.

A Hedge Fund Has $150 Million in Assets at the Beginning