Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mathew's 401 - K plan offers a choice between and S&P 500 Index Fund, a large-cap stock fund, a blue chip stock fund that seeks
Mathew's 401 - K plan offers a choice between and S&P 500 Index Fund, a large-cap stock fund, a blue chip stock fund that seeks high dividend income and modest growth, a fund that invests only in investment grade corporate bonds and a fund that that invests only in government bonds. Mathew allocates 20% of his money to each fund. Which of the following statements offers the best critique of Mathew's "1/N" allocation? CD A. Mathew may not be as well diversified as he thinks because the three stock funds probably own many of the same stocks. OB. There is nothing wrong with Mathew's plan. OC. His plan does not provide sufficient liquidity OD. He should have allocated on 1/3 to stocks and 1/3 to each of the remaining funds
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started