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Which statement about risk control in portfolio construction is correct?
A
Quadratic programming allows for risk control through parameter estimation but manager is concerned about a potential increase in investor redemptions and wants to assess the effects of such an event on the fund's liquidity. The manager asks a junior analyst to estimate the average number of days required to liquidate certain generally requires many more inputs estimated from market data than other methods require.
B
The screening technique provides superior risk control by concentrating stocks in selected sectors based on expected alpha.
C
When using the stratification technique, risk control is implemented by overweighting