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Suppose you are an active fund manager. You are able to generate a maximum of $ 8 million of alpha per year, and you charge

Suppose you are an active fund manager. You are able to generate a maximum of $

8

million of alpha per year, and you charge a fee of

0.02

of AUM per year. You currently have $

392

million in assets under management

(

AUM

) .

In equilibrium, what will be the inflows or outflows for your fund?

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