Question

You are an investment manager who is currently managing assets worth $6 billion. You believe that active management of your fund could generate an additional one-tenth of 1% return on the portfolio. If you want to make sure your active strategy adds value, how much can you spend on security analysis?

Answer 1

6,000,000 spend in security analysis

Step-by-step explanation:

As an investment manager who is currently managing assets worth $6 billion who believes that active management of the fund could generate between an additional one tenth of one percent return on the portfolio.

This implies 1/10th portion (0. 10) or [10℅ of 1℅]

==> .010* .01

==> .001

If I want to make sure my active strategy adds value

I can spend 6 million on security analysis

==> .001*6,000,000,000

==> 6,000,000