Jeff Stone, a trustee of the Shailor College endowment, has questioned the Consultant's recommendation to employ an active management strategy for the entire equity portion of the endowment portfolio. Stone made the following statements :

Statement 1 : Active management is appropriate for large-cap stocks, where managers can take big enough positions to capitalize on pockets of inefficiency

Statement 2 : Because the S&P is price-weighted, out-performing stocks tend to have more and more influence on its value

Statement 3 : The endowment should employ a passive index vehicle for our small-cap portfolio. The market for small-caps tends to be more efficient than the market for large-caps and would provide more opportunities for us to benefit from active management

Indicate whether or not you agree or disagree with each of Stone's statements.