61 A fund-of-funds (FoF) invests equal amounts of capital in the following hedge funds, where incentive fees are calculated on returns net of management fees:

Fund	Gross Annual Return	Management Fee	Incentive Fee
1	4.5%	1.8%	10.0%
2	3.6%	1.2%	10.0%

If the FoF also charges a base fee of 1.0% and an incentive fee of 10.0%, the net annual return to FoF investors is closest to: