A Large-Cap Manager That Has the S&P 500 as Her

Multiple Choice

A large-cap manager that has the S&P 500 as her benchmark decides to increase her allocation to cash. What impact will this have on total risk, active risk and active share of her portfolio?

A) Total risk and active risk will decrease, and active share will increase.
B) Total risk will decrease, and active risk and active share will increase.
C) Total risk and active share will decrease, and active risk will increase.
D) Total risk, active risk and active share will all decrease.