Question
Assume that you have inherited a portfolio in which 60% of the market value consists of shares in a mutual fund that invests in a
Assume that you have inherited a portfolio in which 60% of the market value consists of shares in a mutual fund that invests in a well diversified selection of large company stocks and 40% of the value consists of shares of Kimberly-Clark common stock. Consider three alternatives: a) Keep the portfolio as it is. b) Sell a large part or all of the KMB shares, and re-invest the proceeds in the large-company mutual fund. c) Sell a large part or all of the KMB shares, and re-invest the proceeds in a mutual fund that invests in a well diversified selection of small company stocks.
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