Response to the following problem:
Assume that a wealthy individual comes to you looking for some investment advice. She is in her early forties and has $250,000 to put into shares. She wants to build up as much capital as she can over a 15-year period and is willing to tolerate a ‘fair amount' of risk.
a. What types of shares do you think would be most suitable for this investor? Come up with at least three different types of shares, and briefly explain the rationale for each.
b. Would your recommendations change if you were dealing with a smaller amount of money-say, $50 000? What if the investor were more risk-averse? Explain.