Walter Works for a Large Firm That Produces Software and Has

Multiple Choice

Walter works for a large firm that produces software and has a capitalized value of $10 billion.This firm pays its employees,in part,with the company's stock,compensating Walter an additional thirty percent of his $50,000 annual salary worth of the company's stock.Which of the following is true?

A) This compensation scheme reduces the level of risk in his portfolio since he is employed at the same company.
B) This compensation scheme provides Walter a good means of minimizing financial risk since he can hold stock in his company rather than money in the bank.
C) To reduce his exposure to risk Walter should purchase more stock in his company if he believes more people will buy computers in the future.
D) To minimize risk Walter should sell the stock in his company and buy other assets to diversify his financial holdings.