a. Question 3 Enumcrate four (4) factors to consider in analyzing the domestic economy as part of fundamental analysis. (6 marks) b. Distinguish between time limit orders and Limit orders (4 marks) C. Explain the following Investment ratios and indicate how they are computed: Earnings per share (EPS) and Price Earnings ratio (P/E). (3 marks) d. What is market efliciency? Differentiate between weak and semi strong for efficiency (5 marks) e. Next Pharmacy Ltd, an all equity finance company has started the production of a vaccine against COVID-19. The popularity of the vaccine is such that it expects to pay its shareholders dividends of 150 which grows steadily at 10%. The company has a beta of 1.75. The risk-free rate is 5% and the expected return on the market is 18.34%. Required: Calculate the stock's required rate of return and price per share. (7 marks) (Total 25 marks) Question 4 Gold Coast Securities Ltd is considering two investment opportunities, purchasing stocks or corporate bond. Consider the following information on the two investments: Probability Return on Stocks (%) Return on Bonds (%) 0.3 30 0.4 25 15 0.2 20 0.1 5 28 35 10 Required: a). Compute the following: i). Expected return of the two investments. (4 marks) ii). The standard deviation of the two investments. (8 marks) b). In order to minimize its exposure. Java Ltd has been thinking about diversifying along two options shown below: i). Portfolio I: invest 40,000 cedis in shares and 60,000 cedis in bonds. ii). Portfolio II: invest 55,000 cedis in shares and 45,000 ccdis in bonds. Compute the expected return and standard deviation of each portfolio if the correlation coefficient of the return of the two investments is -0.35. (12 marks) c). Which portfolio would you recommend to Gold Coast based on risk and returns? (1 mark) (Total 25 marks) 3 | Page