4. Suppose you are an active fund manager with a limited capacity to generate alpha of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
4. Suppose you are an active fund manager with a limited capacity to generate alpha of 2.5 million/year. You charge a fee of 0.5% per year. Currently, your portfolio has AUM of 150 million. a. How much alpha is earned by you as fees? How much is left over for your investors? b. Investors saw you had good performance and you got inflows of 200 million, how much alpha is earned by you as fees? How much is left over for your investors? c. What should be your AUM when there is no alpha left for your investors? 4. Suppose you are an active fund manager with a limited capacity to generate alpha of 2.5 million/year. You charge a fee of 0.5% per year. Currently, your portfolio has AUM of 150 million. a. How much alpha is earned by you as fees? How much is left over for your investors? b. Investors saw you had good performance and you got inflows of 200 million, how much alpha is earned by you as fees? How much is left over for your investors? c. What should be your AUM when there is no alpha left for your investors?
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Consider n x n real matrices A satisfying A = A = A-. (a) When n = 2, determine all such matrices. (b) Assuming that -1 is not an eigenvalue of A, determine all such nxn matrices.
-
Do quality-of-work-life programs rely more on individual or organizational aspects of organizational behavior? Why?
-
Explore polygon and polyline shapes
-
Journal Entry from Bank Reconciliation} Pyramid Corporation is assessed a \(\$ 20\) fee as the result of a \(\$ 185\) NSF cheque received from a customer for services purchased on account. Neither...
-
Huang Company uses a standard cost accounting system to account for the manufacture of exhaust fans. In July 2014, it accumulates the following data relative to 1,800 units started and finished....
-
Consider the curve given by x^2 = 5xy - 6. At time t = 2, the value of x is 3 and dx/dt at t=2 is -5. Find dy/dt at t=2.
-
1) Declare a structure called fraclion that has two mon Zero lite ger numbers, numerater, and denominator 2) Implement a function, sun(..) that accepts two fractions as arguments and that returns the...
-
CBS will pay its first dividend of $8 in 8 years. The growth rate is expected to be 4%. Ks are 17%. What price should CBS sell for today
-
Bolton Trucking is divided into two operating divisions: Perishable Foods and Household Goods. The company allocates Personnel and Accounting Department costs to each operating division. Personnel...
-
Earl is the defendant in a business dispute. He is very old and is suffering from many ailments, several of which threaten to kill him. Earl's attorney Alex thinks it would be a good idea to...
-
1. A creative brief of a smart watch product inculde What is the product or service? Who/What is the competition? Who are we talking to? What consumer needs or problems do we address? What does...
-
Effective leadership can help cultivate a culture of change. Using the Internet, research change theories and change leadership. Respond to the following questions: . What does it mean to be a change...
-
what is one of the most important factors that effect performance of actively managed portfolios negatively in the long term?
-
The slopes of the tangents at the points where the curve y = x2 - 4x intersects the X-axis is 1) 1 2) +2 3) +3 4) +4
-
Recording payroll and payroll costs Le Banquet Francaise restaurant employs 1 man- ager, 2 chefs, 4 waiters, and 3 helpers. They are paid monthly as follows: All personnel are entitled to a half...
-
Overtime pay for a production department Harnagle Company employs ten produc- tion workers who are paid $7.50 per hour for first shift and a 50 percent overtime premium for any hours worked in excess...
-
Payroll costs and bonus Marsha's Ceramics has two highly-skilled employees who design and produce exquisite ceramic pieces. Each earns a salary of $1,495 per month. Each also gets 1 /2 month of paid...
Study smarter with the SolutionInn App