1. All of the following are potential disadvantages to the use of company stock as an investment option under a defined contribution plan EXCEPT:

1. Employer stock is a completely undiversified investment option and may be inappropriate from a financial perspective.
2. Employee relation problems may surface if the value of the employer stock declines.
3. If significant balances are built up in the company stock fund, employees may have not only their livelihood but also a sizable block of their savings tied to the well-being of their company
4. Any investment in employer stock must satisfy the requirement that plan assets be expended for the exclusive benefit of employees.
5. Employer stock ownership can make a company more vulnerable to takeover attempts.