An active portfolio manager faces a trade$-$off between:

using the Sharpe measure.

using mean$-$variance analysis.

exploiting perceived security mispricings.

holding too much of the risk$-$free asset.

letting a few stocks dominate the portfolio.

Multiple Choice

$2$ and $3$

$3$ and $4$

$3$ and $5$

$2$ and $5$

$1$ and $2$