Fidelity Investments has tapped its president Abigail Johnson to be CEO of the nation's second-largest mutual fund manager.

Johnson, who is a granddaughter of Fidelity founder Edward "Ned" Johnson, was appointed president of the Boston-based company two years ago and will retain this role while serving in the top executive post. She replaces her 84-year old father Edward C. Johnson III, who held the CEO position since 1977 and will continue with Fidelity serving as chairman of the board.

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