International Advisers Company (IAC) is an SEC-registered investment counseling firm involved solely in managing international securities portfolios. After much research on the developing economy and capital markets of the country of Tiwato, IAC has decided to include an investment in the Tiwato stock market in its Emerging Market Commingled Fund. However, IAC has not yet decided whether to invest actively or by indexing. Your opinion on the active versus indexing decision has been solicited. A summary of the research findings follows: Tiwato's economy is fairly well diversified across agricultural and natural resources, manufacturing (both consumer and durable goods, and a growing finance sector. Transaction costs in securities markets are relatively large in Tiwato because of high commissions and government "stamp taxes" on securities trades, Accounting standards and disclosure regulations are quite detailed, resulting in wide public availability of reliable information about companies financial performance. Capital flows into and out of Tiwato and foreign ownership of Tiwato securities are strictly regulated by an agency of the national government The settlement procedures under these ownership rules often cause long delays in settling trades made by non-residents. Senior finance officials in the government are working to deregulate capital fiows and foreign ownership, but IAC's political consultant believes that isolationist sentiment may prevent much real progress in the short run. Recommend whether IAC should invest in Tiwato actively or by indexing and justify your recommendation by discussing at least four aspects of the Tiwato environment that favors either investing actively or investing by indexing International Advisers Company (IAC) is an SEC-registered investment counseling firm involved solely in managing international securities portfolios. After much research on the developing economy and capital markets of the country of Tiwato, IAC has decided to include an investment in the Tiwato stock market in its Emerging Market Commingled Fund. However, IAC has not yet decided whether to invest actively or by indexing. Your opinion on the active versus indexing decision has been solicited. A summary of the research findings follows: Tiwato's economy is fairly well diversified across agricultural and natural resources, manufacturing (both consumer and durable goods, and a growing finance sector. Transaction costs in securities markets are relatively large in Tiwato because of high commissions and government "stamp taxes" on securities trades, Accounting standards and disclosure regulations are quite detailed, resulting in wide public availability of reliable information about companies financial performance. Capital flows into and out of Tiwato and foreign ownership of Tiwato securities are strictly regulated by an agency of the national government The settlement procedures under these ownership rules often cause long delays in settling trades made by non-residents. Senior finance officials in the government are working to deregulate capital fiows and foreign ownership, but IAC's political consultant believes that isolationist sentiment may prevent much real progress in the short run. Recommend whether IAC should invest in Tiwato actively or by indexing and justify your recommendation by discussing at least four aspects of the Tiwato environment that favors either investing actively or investing by indexing