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Assume that the economy has three types of people.20% are fad followers,75% are passive investors,and 5% are informed traders.The portfolio consisting of all informed traders has a beta of 1.4 and an expected return of 16%.The market has an expected return of 10% and the risk-free rate is 4%.
-The alpha for the passive investors is closest to:
Societal Standard
Norms and expectations established by society that guide the behavior of its members, often reflecting shared values or beliefs.
Universally Across Cultures
Referring to concepts, practices, or feelings that are found in all human cultures worldwide, without exception.
Evolutionary Nature
The inherent qualities or characteristics determined by genetic inheritance and natural selection that influence behavior and development.
Sigmund Freud
An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.
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