Investment Policy Statements for David Lywie and Julio Stromek

Explanation

Based on the information provided, we can assess the risk tolerance of David Lywie and Julio Stromek.

1. David Lywie:

• Mid-career with low job-related income expectations: This suggests that David's current income may not be substantial, and he may not have significant financial resources or savings.
• Very little insurance coverage: This implies that David may not have a robust financial safety net in case of unexpected events or emergencies.

Given these factors, it is likely that David Lywie has a lower risk tolerance. Since he has limited financial resources and low income expectations, he may be more risk-averse and prefer investment strategies that prioritize capital preservation and income stability over higher-risk, higher-return opportunities.

2. Julio Stromek:

• Fairly high net worth: Julio's high net worth indicates that he may have accumulated significant financial assets and resources.
• Long-term job-related earning potential: Julio's potential for long-term earning suggests that he has the ability to generate substantial income over time.

Based on these factors, Julio Stromek is likely to have a higher risk tolerance. With significant financial resources and higher earning potential, Julio may be more willing to take on greater investment risks in pursuit of higher returns. He may have a longer investment horizon and be more comfortable with volatility in the short term.

Therefore, considering the information provided, the most likely correct statement is: B. Stromek has higher risk tolerance than Lywie.