Revision Notes; Q21 section 4 (Sep 2017, Q7)

Discussion in 'SP5' started by MJK23, Apr 25, 2022.

  1. MJK23

    MJK23 Active Member

    Hi,

    Am looking at the performance fee calculation for fund B on part (ii) of Q7 on the September 2017 paper. The performance fee for t=1 is showing as 0.384 in the solutions. However, am getting 20% *(108-100) = 1.60.
    Does anyone know 0.384 is found?

    Thanks,
    M
     
    MJK23, Apr 25, 2022
    #1
  2. MJK23

    MJK23 Active Member

    Sorry for reference it's question 23 in the Revision Notes, Section 4
     
    MJK23, Apr 25, 2022
    #2
  3. Joe Hook

    Joe Hook ActEd Tutor Staff Member

    100m * 20% * (8% - 6.08%) = 0.384 as it's 20% of the outperformance of the index.

    Joe
     
    Joe Hook, Apr 25, 2022
    #3
  4. MJK23

    MJK23 Active Member

    Thanks very much, I see that now.
     
    MJK23, Apr 25, 2022
    #4

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