What is the alpha for the fad followers

Reference no: EM13167520

Q1: The cost of leasing car is $1000 for a down payment and processing fee plus $360 per month. For how many months can you lease a car with $3680?

Q2: Assume that the economy has three types of people. 15% are fad followers, 75% are passive investors, and 10% are informed traders. The portfolio consisting of all informed traders has a beta of 1.3 and an alpha of 3.51%. The market has an expected return of 12% and the risk-free rate is 4%. What is the alpha for the fad followers?

Reference no: EM13167520

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