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Student name:__________ MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 1) A portfolio manager who adds commodities to a portfolio of traditional investments is most likely seeking to: A) both increase expected returns and decrease portfolio variance. B) decrease portfolio variance only. C) increase expected returns only. 2) A Hong Kong hedge fund was valued at HK$400 million at the end of last year. At year's end the value before fees was HK$480 million. The fund charges 2 and 20. Management fees are calculated on end- of-year values. Incentive fees are independent of management fees and calculated using no hurdle rate. The previous year the fund’s net return was 2.5%. The annualized return for the last two years is closest to: A) 8.1%. B) 13.6%. C) 7.9%. 3) A Canadian hedge fund has a value of C$100 million at the beginning of the year. The fund charges a 2% management fee based on assets under management at the beginning of the year and a 20% incentive fee with a 10% hard hurdle rate. Incentive fees are calculated net of management fees. The value at the end of the year before fees is C$112 million. The net return to investors is closest to: A) 10%. B) 9%. C) 8%. 4) For a given set of underlying real estate properties, the type of real estate index that is most likely to have the lowest standard deviation is a(n): A) REIT trading price inde
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