Reading 19: Low-basis Stock－LOS c investor, executive, individual

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CFA Institute Area 3-5, 7, 12, 14-18: Portfolio Management
Session 4: Private Wealth Management
Reading 19: Low-basis Stock
LOS c: Explain individual investors' attitudes toward holding their own company stock during the entrepreneurial, executive, and investor stages.

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If we define an investors equity holding cycle as a series of stages, in each stage the common factors that impede diversification are:

A) taxes and emotions.

B) taxes and liquidity.

C) liquidity and emotions.

D) valuation and emotions.

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Answer and Explanation

If we define an investors equity holding cycle as a series of stages, in each stage the common factors that impede diversification are taxes and emotions.