Use the Following Information to Answer the Question(s)below

question 41

Multiple Choice

Use the following information to answer the question(s) below.
John Galt is a mutual fund manager at Atlas Asset Management.He can generate an alpha of 2% a year up to $500 million of invested capital.After that amount,his skills are spread too thin,so he cannot add value and his alpha is zero for all investments over $500 million.Atlas Asset Management charges a fee of 0.80% on the total amount of money under management.Assume that there are always investors looking for positive alpha investments and no investor would invest in a fund with a negative alpha.Assume that the fund is in equilibrium,meaning that no investor either takes out money or wishes to invest new money into the fund.
-The alpha that investors in Galt's fund expect to receive is closest to:

• A)-.80%.
• B)0.0%.
• C)0.80%.
• D)1.8%.

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Definitions:

Amnion

A thin membrane forming a closed sac around the embryo and fetus, containing the amniotic fluid which provides a protective environment.

Fetus

The stage of life from 8 weeks of gestation to birth.

Blastocyst

An early stage of embryonic development that consists of a sphere of cells surrounding a fluid-filled cavity and the inner cell mass that will eventually develop into a fetus.

Diploid Zygote

A fertilized egg cell that has two sets of chromosomes, one from each parent, initiating development of a new organism.