这道题可以麻烦老师讲一下吗谢谢！

问题如下：

Quagmire Case Scenario

In the UPX Fund, an investment in the new technology sector has performed well and is expected to continue to do so. However, the proportion of the fund invested in the new technology sector is now larger than what is permitted in the fund prospectus. Holt intends to reduce the holdings in the sector to comply with the prospectus over the next two months before the quarter ends. The volume of shares that need to be sold is approximately 20% of the daily volume in their respective individual markets.

To execute the trades in the new technology sector, Holt asks his team to consider three possible options:

Upon completion of the trades, Holt calculates an expanded implementation shortfall to evaluate trade costs. The data are provided in Exhibit 1.

Exhibit 1. Expanded Implementation Shortfall Information ($) for the Trades in the New Technology Sector

Holt asks his team to determine whether trading with a new securities brokerage, Zavier Brokerage (ZB), appears to be viable. The team sent ZB a buy order for 5,000 shares of XTV stock to test the brokerage’s trading abilities. The anticipated trade execution cost was 110.00 basis points (bps), based on previous trading with other brokerages. Exhibit 2 displays ZB’s execution performance.

Exhibit 2. ZB Trade Execution Performance

Question

The primary reason for the planned trades of shares in the new technology sector of the UPX Fund over the next few months is most likely to:

选项：

A.manage risk. B.realize a profit. C.meet cash flow needs.

解释：

Solution

A is correct. The limits for particular fund holdings within a prospectus are to prevent unintended risk taking by not having the fund sufficiently diversified. Consequently, the reduction of holdings in the new technology sector is for risk management purposes as detailed by the prospectus.

B is incorrect. Although a profit may be recognized by selling stocks in the new technology sector, risk management is the primary motive for planned trading because the proportion invested in this sector exceeds the limits imposed by the fund prospectus.

C is incorrect. Although the selling of securities will produce cash, there is no indication that the fund requires cash for a redemption or to cover any immediate trading costs.