Mr. Smith came to your office today to discuss his tax return, which you have just completed. During the course of your conversation, it became clear that all of Mr. Smith's retirement money is invested in his two favorite foods, a potato chip maker and an ice cream distributor You attempted to explain to Mr. Smith the issues relating to investing in only two stocks, but he did not have time to listen, so he asked you to write him a memo.

Prepare a memo to Mr. Smith explaining the issues relating to security risk, portfolio risk, and diversification.

Reminder: Use a standard business memorandum or letter format with a clear beginning, middle, and end. Do not convey information in the form of a table, bullet point list, or other abreviated presentation.

To: Mr. Smith

Re: Investments, risks, and implications.