Signet Hedge Fund launched a fund with a net asset value of $50M. The fund charges a 20% incentive fee. At the end of year 1, the fund declined by 10%. At the end of year 2, the fund appreciated by 10%. Assuming that the fund has a high watermark (no hurdle rate), What was the incentive fee charged by the fund at the end of year 1?
1) $5M
2) $10M
3) $4.95M
4) None