为什么管理费最小的TE最小

问题如下：

The board decides to consider adding a mid-cap manager. McMahon presents candidates for the mid-cap portfolio. Exhibit 2 provides fees and cash holdings for three portfolios and an index fund.

Based on Exhibit 2, which portfolio will most likely have the lowest tracking error?

选项：

A.

Portfolio 1

B.

Portfolio 2

C.

Portfolio 3

解释：

Of the three portfolios, Portfolio 3 has the lowest cash holding and the lowest fees. As a result, Portfolio 3 has the potential for the lowest tracking error compared with the other proposed portfolios.