QUESTION $1(25$ MARKS$)$

$($a$)$ Joe considers building a portfolio for himself, discuss which school of thought

would be practical for her portfolio, the Traditional or Modern Portfolio Theory.

$(10$ marks$)$

$($b$)$ Elaborate on this statement $$Dividends are so important, but at the same time,

dividend policy is irrelevant$.$

$(5$ marks$)$

$($c$)$ Mac is unable to decide whether to invest in money or capital market. Explain

to him by differentiating both markets.

$(10$ marks$)$