Peter and Andrea Mueller have built up their $600,000 investment portfolio over many years through regular purchases of mutual funds holding only U.S. securities. Each purchase was based on personal research but without consideration of their other holdings. They would now like advice on their total portfolio, which follows:

Type Market SectorBetaPercent of Total

Andrea's company StockStockSmall-cap growth 1.4 35

Blue-chip growth fundStock Large-cap growth1.2 20

Super-beta fund Stock Small-cap growth 1.6 10

Conservative fund Stock Large-cap growth 1.05 2

Index fund Stock Large-cap growth 1 3

No-dividend fund Stock Large-cap growth 1.25 25

long-term zero-coupon fund Stock Government 0 5

Evaluate the Muellers' portfolio in terms of the following criteria:

a.Preference for "minimal volatility"

b. Equity diversification

c. Asset allocation (including cash flow needs)