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An active manager that charges a 1% annual management fee has a single-factor alpha of 3% annualized. When using a multi-factor model to derive alpha,

An active manager that charges a 1% annual management fee has a single-factor alpha of 3% annualized. When using a multi-factor model to derive alpha, the manager's alpha drops to 0.2% annually. Given these results, would you likely prefer to invest in the active manager or a semi-active factor investing strategy? Please list your reason(s).


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