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Case summary:
Person X was working with Company ECY and has to sign up with the company’s 401(k) plan. Person X was confused to make the investments. There are more number of stocks available in Company ECY. Person X decides to make an investment in a diversified portfolio which classified into 70% in equity, 25% in bonds, and 5 % in the
He takes help from Person D, who works in the department of finance. Person D gives some information regarding the equity mutual funds and Company V500 index funds. V500 is basically identical to the B S&P 500 Index fund offered in 401(k) plan.
Characters in the case:
Person X: The employee of ECY.
Person D: The person who works in the company’s finance.
To discuss: The implications for the mutual fund investors.
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Chapter 14 Solutions
EBK CORPORATE FINANCE
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