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Business, 11.10.2020 07:01 SmokeyRN

Davita Spencer is a manager at Half Dome Asset Management. She can generate an alpha of 1.55% per year on up to $93 million. After that her skills are spread too thin, so she cannot add value and her alpha is zero. Half Dome charges a fee of 1.14% 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,

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Davita Spencer is a manager at Half Dome Asset Management. She can generate an alpha of 1.55% per ye...
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