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

question 3

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 amount of money that Galt's fund will have under management is closest to:

• A)$500 million.
• B)$600 million.
• C)$1000 million.
• D)$1250 million.

---

Definitions:

Pension Benefits Standards Act

A federal act regulating pension plans in industries under the jurisdiction of the Government of Canada.

Government of Canada

The federal administration or authority in Canada, comprised of the executive, legislative, and judicial branches responsible for national governance.

Employee Benefits

Compensation provided to employees in addition to their salaries, such as health insurance, retirement contributions, and paid vacation, aimed at improving worker satisfaction and loyalty.

Wages and Salaries

Compensation received by employees for their labor or services, typically paid on an hourly, daily, or monthly basis.