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

question 42

Multiple Choice

Use the following information to answer the question(s) below.
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 fad follower's portfolio is closest to:

• A)-0.9%.
• B)0.0%.
• C)3.6%.
• D)6.0%.

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Definitions:

Social Cognitive

Pertaining to the understanding of social behaviors and cognition, emphasizing the role of observational learning, imitation, and modeling.

Televised Models

Representations or examples displayed on television that influence viewer perceptions and behaviors.

Bandura

A psychologist named Albert Bandura who is best known for his work on social learning theory, emphasizing the role of observational learning, imitation, and modeling in behavior.

Aggression Effects

The outcomes or consequences of aggressive behavior, which can include physical injury, psychological harm, and strained relationships.