Implied hurdle rate

CFA Level III
#1

This is from Q9 of exam 2006. Is CFAI text still cover this? Which page? (just wondering if there is any concept behind this “implied”) - sticky

#2

i was puzzle myself

#3

Got more confusion from Q10, exam 2006 :slight_smile: For second statement of part (A), the solution seems to be answering “why the hurdle rate does not need to be high” instead of answering “why is the hurdle rate so low”. Just don’t feel comfortable with this solution. It’s saying something correct, but it’s simply not answering the question to me. sigh. - sticky

#4

I confused the implied hurdle rate with the hurdle rate for HFs that needs to be exceeded before any incentive fees are paid out…

#5

bigwilly Wrote: ------------------------------------------------------- > I confused the implied hurdle rate with the hurdle > rate for HFs that needs to be exceeded before any > incentive fees are paid out… are they not the same thing IN PRACTICE? managers get rewarded for returns over their “benchmark” (ie the hurdle rate) - sticky