Hi. I've found some observations in questions 9.1 and 9.3 in topic P2.T8.9.
In 9.1 says alternative C in the answers, but the explanation corresponds to alternative B. So, should i suppose alternative B is the correct ?
In 9.3 answer says B (700-800) millions, but the correct range will be 900 and 1000, and the correct answer will be D.
Why 900 and 1000 ?:
Carried interest = ( 6 billions - 2 billions ) * 0.2 = 800
Management fee = 2 billions * 0.01 = 20
The best case is that at year 5 the funds will be almost totally returned, then the lower bound of Mgmt. fee closes t0 20 * 5 = 100.
The worst case is that at year 10 the funds will be totally returned at once, then the upper bound of
Mgmt. fee closes to 20 * 10 = 200.
Then the range will be [ 800 + 100, 800 + 200].
In the question says the fund realized a 6 billions investment, but the answer refers to a 5 billions investment, which is the correct ?
Thanks in advance.
Paul.
In 9.1 says alternative C in the answers, but the explanation corresponds to alternative B. So, should i suppose alternative B is the correct ?
In 9.3 answer says B (700-800) millions, but the correct range will be 900 and 1000, and the correct answer will be D.
Why 900 and 1000 ?:
Carried interest = ( 6 billions - 2 billions ) * 0.2 = 800
Management fee = 2 billions * 0.01 = 20
The best case is that at year 5 the funds will be almost totally returned, then the lower bound of Mgmt. fee closes t0 20 * 5 = 100.
The worst case is that at year 10 the funds will be totally returned at once, then the upper bound of
Mgmt. fee closes to 20 * 10 = 200.
Then the range will be [ 800 + 100, 800 + 200].
In the question says the fund realized a 6 billions investment, but the answer refers to a 5 billions investment, which is the correct ?
Thanks in advance.
Paul.
