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Walter White is a manager at ABC Asset Management. He can generate an alpha of 2.22% per year on up to $108 million of assets.
Walter White is a manager at ABC Asset Management. He can generate an alpha of 2.22% per year on up to $108 million of assets. After that his skills are spread too thin, so he cannot add value and his alpha is zero on any additional money under management. ABC charges a fee of 1.13% per year on the total amount of money under management (at the beginning of each year). Assume that there are always investors looking for positive alpha and no investor would invest in a fund with a negative alpha. In equilibrium, that is, when no investor either takes out money or wishes to invest new money, a. What alpha do investors in 's fund expect to receive? % (no decimal places needed) b. How much money will Walter have under management? \$ million (answer in whole number; no decimal places needed) Fill in above blanks
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