Question: Assume that a wealthy woman comes to you looking for some investment advice. She is in her early forties and has $250,000 to put into stocks. 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 stocks do you think would be most suitable for this investor? Come up with at least three types of stocks, 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.