Series 7 - General Securities Representative Exam
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You new client, Shawna, is 58 years old. She has an existing portfolio that was transferred in kind to your brokerage firm. Upon review, you see that she is invested in small cap stocks with that constitute an unusually high percentage of her total portfolio. Which of the following may be your BEST recommendation?
To sell covered calls in the small caps that are optionable
A
To dollar cost average the small cap stocks due to her age
B
To reallocate the capital to Class B Mutual Fund Shares
C
To reallocate some of the capital into large cap blue chip stocks
D
Explanations
Due to Shawna's age, she may be overexposed in small caps. Class B shares may tie up her capital for too long based on her age. Suggesting to diversify into large cap stocks would be the best recommendation based on the choices