Question: You are advising a client on which stocks to include in their portfolio. The client currently has an equally weighted portfolio consisting of stock in

You are advising a client on which stocks to include in their portfolio. The client currently has an equally weighted portfolio consisting of stock in Delta airlines, Southwest airlines, Amazon inc, and Apple computers. They are considering buying stock in one of the following firms, American Airlines, Microsoft inc, and Coca-Cola.

Is it usually a good idea for this client to hold only 4 or 5 stocks? Explain why.

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