Hedge Fund Incentive Fees Are Essentially

Multiple Choice

Hedge fund incentive fees are essentially

A) put options on the portfolio with a strike price equal to the current portfolio value.
B) put options on the portfolio with a strike price equal to the expected future portfolio value.
C) call options on the portfolio with a strike price equal to the expected future portfolio value.
D) call options on the portfolio with a strike price equal to the current portfolio value times one plus the benchmark return.
E) straddles.