NO.PZ2023010903000066
问题如下：
Before hiring Välimaa, the Missipina Foundation’s portfolio had been managed internally.
Välimaa reviews a memo from Missipina’s investment committee that summarizes the previous internal manager’s approach to portfolio construction:
“The manager used a growth at a reasonable price (GARP) investment approach to identify attractively priced stocks. He emphasized understanding a firm’s governance structure, management quality, business model/competitive landscape, and environmental, social, and governance (ESG)-related attributes. The portfolio generally held less than 60 stocks, significantly less than the number of stocks in the benchmark and the portfolio was not well diversified.”
Determine, based solely on the memo’s content, whether the former manager’s portfolio would most likely be characterized as having high or low:
i. Active risk
ii. Active Share
Justify each response.
选项：
解释：
The portfolio has high active shares because the portfolio generally held less than 60 stocks, significantly less than the number of stocks in the benchmark.
The portfolio also has high active risk because it was not well diversified compared to benchmark. It means the correlation between the portfolio and benchmark is low resulting high active risk. In addition, the portfolio has high active shares that also increase active risk.