题目做对了，但是解析这句话不是很理解，请老师协助解答。

问题如下：

Dieter and Lange assess two additional portfolio managers:

Manager 4: Based on forecasts of gold prices and interest rates, each month the manager decides to overweight/underweight a euro-denominated money market fund and a gold trust exchange-traded fund (ETF). The benchmark portfolio is 60% gold and 40% money market.

Manager 5: Based on internal forecasts, the manager may overweight/underweight its allocation to fifteen European countries using country-specific ETFs. Changes are made on a quarterly basis.

Dieter observes the following:

• Manager 4 would improve its information ratio by re-weighting its portfolio on a weekly basis.
• Manager 5 has a lower breadth than stated because country returns are likely to be highly correlated.
• Because both managers are required to use long-only strategies, the transfer coefficients will be lower than if the managers were unconstrained.

With respect to the Fundamental Law of Active Management, Dieter is least likely correct in his observation about:

选项：

A.

breadth.

B.

the transfer coefficient.

C.

the information ratio.

解释：

C is correct. Although increasing the rebalancing frequency may increase the information ratio, it will do so only to the extent that sequential active management decisions remain independent.

A is incorrect because the breadth of a portfolio is equal to the number of investment decisions, assuming the returns are uncorrelated. If returns are correlated, as one would expect for countries located in the same region and mostly sharing the same currency, then breadth is lower.

B is incorrect because the transfer coefficient is reduced when there are constraints on the portfolio, such as allowing long-only positions and limiting the maximum allocation to a particular sector.