A hedge fund with net asset value of $62 per share currently has a high water mark of $66. Suppose it is January 1, the standard deviation of the fund’s annual returns is 50%, and the risk-free rate is 4%. The fund has an incentive fee of 20%. A. What is the value of the annual incentive fee according to the Black-Scholes formula?
B. What would the annual incentive fee be worth if the fund had no high water mark and it earned its incentive fee on its total return?
C. What would the annual incentive fee be worth if the fund had no high water mark and it earned its incentive fee on its return in excess of the risk-free rate?
D. Re-calculate the incentive fee value for part (b) now assuming that an increase in fund leverage increases volatility to 53%.

Horace society is planning its annual western fair raceway gala. the gala committee has assembled the following expected costs for the event: dinner (per person) $10 gaming token and program (per person) $2 prize payouts $4,300 tickets and advertising $800 private box suite rental $1,700 lottery licenses $200 the committee members would like to charge $40 per person for the evening’s activities. required: 1. what is the break-even point for the dinner-dance (in terms of the number of persons who must attend)? 2. assume that last year only 200 persons attended the dinner-dance. if the same number attend this year, what price per ticket must be charged in order to break even? 3. refer to the original data ($40 ticket price per person). prepare a cvp graph for the dinner- dance from zero tickets up to 600 tickets sold.