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 alpha of 3.82%. The market has an expected return of 10% and the risk-free rate is 4%.

What is the alpha for the fad followers?

Do not copy from Chegg and give complete answer with explanation