Equity CFAI Q on active risk

CFA Level III Portfolio Management
#1

Why are we ignoring the higher sharpe ratio for Blue? higher sharpe essentially means higher level of returns for the same levels of risk so it should be more risk-efficient? It also has lower vol than March. why does # of securities hold more weight here for the "risk efficient delivery of results?

In another Q on the same exhibit, it says that Ash will minimize active risk for the final Amity equity fund based on the fact that it has a higher covariance with the present fund. But intuitively, its not making sense bc Ash has the highest active risk of the 3…ASKING FOR A FRIEND…

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#2

What does it mean to be risk efficient?

#3

The March one makes sense to be risk-efficient. Lowest active risk w highest active share.

But still unclear on how adding Ash as a complement to Amity equity fund will minimize active risk…

#4

How do you manage active risk? That will lead you to the covariance being the main difference so if you introduce a new fund that moves in tandem with the existing or the benchmark then active risk should be lower. That is efficient.