Qurtions 5 through 10 relate to James Stepbenton. Select and jatiff the beet amsiver. James Stephenson, age 55 and single, ir a surgeon who has accumulated a substantial investment portfolio without a clear long-term strategy in mind. Two of his paticnes who work in financial markets comment as fillows: - Jarnes Hedinas "My invectment firm, based on its experience with inventors, has standard inveament policy statements in five catcgories. Yee wudd be better served to adopt one of thene standard policy statements isstad of apending time developing a policy based on your individuat circumstances," - Charlos Gionta: "Developing a long-term polficy can he unwe given the flucruations of the market. You want your invesiment adviser to teact continuoudy to changing conditions and not be lisited by a set policy." Stcphenson hires a financial adviser, Caroline Coppu. At their initial meeting, Coppa compiles the following notes: Stephenson currently has a $2.0 million portfolio that has a large concentration in sinall-capitaliation U.S. equitics. Over the past five yeark, the portiolio has averaged 20 percent annual total return on investment. Stephenson hopes that, over the long term, hit portfolio will continue to earn 20 perecnt annually. When asked about hir 8 Learning Outcumes, Summary Overview, and Problems risk tolerance, he described it as "average." He was surprised when informed that U.S. small icap portfolios have experienced extremely high volasility. He does not expect to retire before age 70. His current income is more than aufficient to meet his expenses. Upon retirement, he plans to sell his surgical practice and ue the proceeds to purchase an annuity to cover his postretirement cash flow neads. Both his income and realined capital gains are taxed at a 30 percent rate. No pertinent legal or tegutatory tesues apply. He has no penvion or retirement plan but doe have sufficient health inturance for pourretirement needs. whit charastertant as nour appropriate destemining facior hir Coppa te ficus en is A. Renum dain B. Nalisy to tibe tiat C. Reaim iryuitement (9) Stephenann's time horinon is best dhanctirisid a A. Shumterm end windetupt 4 10. Stephenson's return objective and risk tolerance are most approptiately described as