If the Risk-Free Interest Rate Is Rf and Equals the Fund's

If the risk-free interest rate is rf and equals the fund's benchmark, the portfolio's net asset value is S0, and the hedge fund manager incentive fee is 20% of profit beyond that, the incentive fee is equivalent to receiving ________ call(s) with exercise price ________.

A) .2; S₀
B) 1; S₀(1 + r_f)
C) 1.2; S₀
D) .2; S₀(1 + r_f)

Correct Answer:

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