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A portfolio manager at an investment firm manages a number of accounts for multiple clients. The manager is analyzing the dispersion that occurs among these accounts, with dispersion defined as the difference between the maximum and minimum return for the accounts. The manager explores the various drivers of dispersion and deliberates over how dispersion can be minimized. Which of the following conclusions is correct for the manager to reach?
A
Dual-benchmark optimization can reduce dispersion and help achieve higher average returns.
B
A portfolio manager's tracking error and dispersion tend to be proportional to each other over time.
C
Dispersion is always client-driven since it refers to the variance in the performances of client portfolios managed by the same manager.
D
Portfolio managers can control dispersion and should aim to reduce any existing dispersion to zero.