Sept 2013 q15

Discussion in 'SP5' started by dimitris13, Mar 16, 2020.

  1. dimitris13

    dimitris13 Member

    Hi there,

    the solutions mention the following
    Impose a minimum number of shares in a portfolio; why impose such a restriction?

    then it says a maximum amount that can be invested in a share; is this to put a limit in share price?
     
  2. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    The minimum number of shares is to spread the risk across a large number of holdings - diversification. The maximum holding in any share is to do the same - ensure diversification.
     
    dimitris13 likes this.

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