Finance Case Study

Read the attached article on FANMAG.

You run into your close friend who tells you that he has come into a six figure inheritance. He tells you that after watching Jim Cramer he has decided to put it all into FANMAG.

You have just finished the Investments section of your Personal Financial Planning course.

In no more than two pages, answer the following questions:

1-What are the advantages and disadvantages of concentration in just a few stocks?

2- What would you tell your friend about his exposure to unsystematic risk in FANMAG?

3- Should your friend consider other options for investing his inheritance?

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