Question: Consider the client in problem 16 with A = 3.5. a. If the client chose to invest in the passive portfolio, what proportion (y) would

Consider the client in problem 16 with A = 3.5.
a. If the client chose to invest in the passive portfolio, what proportion (y) would be selected?
b. Is the fee (percentage of the investment in your fund, deducted at the end of the year) that you can charge to make the client indifferent between your fund and the passive strategy affected by her capital allocation decision?

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