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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 expected return for the fad follower's portfolio is closest to:
Groupthink
A psychological phenomenon that occurs within a group of people when the desire for harmony and conformity results in irrational or dysfunctional decision-making outcomes.
Increased Performance
An improvement in the efficiency, output, or quality of a process or system.
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An enhanced or augmented amount of data or knowledge made available for a particular subject or area.
Groupware
Software that supports collaborative group work, such as sharing documents and communication among team members.
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