Can someone please do a full walk through of this question. I literally can never understand how to go about these or even think about them from a bigger perspective.
United Capital is a hedge fund with $250 million of initial capital. United charges a 2% management fee based on assets under management at year end and a 20% incentive fee based on returns in excess of an 8% hurdle rate. In its first year, United appreciates 16%. Assume management fees are calculated using end-of-period valuation. The investor’s net return assuming the performance fee is calculated net of the management fee is closest to: (2020 Q26)
**answer is B