LaRee is a covered member who owns $4\%$ of a nondiversified mutual

fund that holds XYZ stock in its portfolio. The total portfolio is worth

$10,000,000$ and $14\%$ of the portfolio is in XY z shares. This relationship

impairs independence.

Ferdinand is a covered member who owns $7\%$ of a diversified mutual

fund. The mutual fund holds $xYZ$ stock in its portfolio. The fund's total

portfolio is $$100,000,000.$ XYZ shares make up $2\%$ of the portfolio's

value. This relationship impatrs independence.

Leslie is a covered member who chooses investments for his own