Active Risk

Discussion in 'P2.T8. Investment Management (15%)' started by rahul.goyl, Nov 5, 2009.

  1. rahul.goyl

    rahul.goyl Member

    Hi David,
    Coud you plz explain this one.

    Which of the following statements is CORRECT?
    I.Implementation risk differs from tactical asset allocation risk in that implementation risk refers to the risk arising from implementation costs to the portfolio and tactical asset allocation risk refers to the difference between the portfolio and the strategic benchmark.
    II.Active risk at the plan level refers to the risk that plan assets might underperform the tactical asset allocation.
    III.Active risk at the manager level refers to the risk that a given manager might underperform the strategic benchmark.

    A) I only.
    B) II and III.
    C) II only.
    D) I and III.


    Thanks
    Rahul

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