An Active Portfolio Manager Faces a Trade-Off BetweenI) Using the Sharpe

Multiple Choice

An active portfolio manager faces a trade-off betweenI) using the Sharpe measure.II) using mean-variance analysis.III) exploiting perceived security mispricings.IV) holding too much of the risk-free asset.V) letting a few stocks dominate the portfolio.

A) I and II
B) II and V
C) III and V
D) III and IV
E) II and III