SIE Understanding Products and Their Risks Practice Question 24

Correct Answer: B

Explanation:

B: A typical hedge fund manager's annual fee is 2 percent of the assets under management, charged quarterly, and a performance fee of 20 percent of the profits. Because of the competitive market for accomplished fund managers, the performance fee may be even higher for larger funds. Choices A, C, and D are sales and distribution charges for mutual funds but are not typically part of the hedge fund manager's annual fee.