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Assume that the economy has three types of people.20% are fad followers, 70% are passive investors, and 10% are informed traders.The portfolio consisting of all

Assume that the economy has three types of people.20% are fad followers, 70% are passive investors, and 10% are informed traders.The portfolio consisting of all informed traders has a beta of 1.2 and an alpha of 4.21%.The market has an expected return of 9% and the risk-free rate is3%.

What is the alpha for the fad followers, as a percentage to two decimal places?

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