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Informed traders ought to be able to beat the market. Assume that the portfolio of the average informed trader has a beta () of 1.4

Informed traders ought to be able to beat the market. Assume that the portfolio of the average informed trader has a beta () of 1.4 and an expected return of 16%. If the expected return on the market is 10% and the risk-free rate is 4%, then what is the average alpha () of these informed traders portfolios?

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