1. For each of the following cases, suggest the appropriate strategy or strategies;
a. John smith, 25 years old, has a risk tolerance that increases by 20 percent for each 20 percent increase in wealth. He wants to remain invested in equities always.
b. Elaine smith, has a one-million-dollar portfolio split between stocks and money market instruments in a ratio of 70/30. Her risk tolerance increases more than proportionately with changes in wealth, and she wants to speculate on a flat market or moderate bull market.
c. Joan reeves has a 2-million-dollar portfolio. She does not want portfolio value to drop below one million dollars but also does not want to incur the drag on returns of holding a large part of her portfolio in cash equivalencies.
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