Chartered Financial Analyst Level 2
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A fund's CIO makes the following changes to the fund's investment strategy:
| | Old Strategy | New Strategy |
|---------------------|--------------|--------------|
| Investment universe | 1,000 stocks | 1,500 stocks |
| Information coefficient | 0.5 | 0.4 |
| Transfer coefficient | 0.3 | 0.2 |
| Active risk | 2.0% | 2.5% |
In aggregate, the changes will:
A
reduce the expected active return of the fund.
B
have no impact on the expected active return of the fund.
C
increase the expected active return of the fund.