问题如下：
Which fund in Exhibit 1
most likely has the greatest implicit costs to implement its strategy?
选项：
A. Fund 1
B. Fund 2
C. Fund 3
解释：
Because Fund 1 has
a large AUM but focuses on small-cap stocks, holds a relatively small number of
securities in its portfolio, and prefers to make large trades, Fund 1 likely
has the highest implicit costs. Each of these characteristics serves to
increase the market impact of its trades. Market impact is a function of the
security’s liquidity and trade size. The larger a trade size relative to a
stock’s average daily volume, the more likely it is that the trade will affect
prices. The relatively low level of trading volume of small-cap stocks can be a
significant implementation hurdle for a manager running a strategy with
significant assets under management and significant positive active weights on
smaller companies.
