1. a. i. Define the term derivative securities and state the main rationale for their use. ii. Mention three types of derivative securities. b. i. Differentiate between systematic and unsystematic risks. ii. For differing consumption, investors need to be compensated for some three things. Name any two. c. Compute the variance and standard deviation using the information in the following table: Probability Return 0.18 0.28 0.12 0.20 0.30 0 0.25 -0.10 0.15 0.40 d. Yaw purchased a stock for C2,000 and sold it after a year for C2,500. Within this period, he received a dividend of $200. i. Calculate the holding period return ii. How much of the return is due to price appreciation or depreciation and how much is due to cash receipt? e. Consider an investment with the following data: Year Beginning value Ending value HPR 1 1,500 1,700 13.33% 2 1,650 1,820 10.30% 3 2,000 1,850 -7.5% i. Calculate the arithmetic mean. ii. Calculate the geometric mean. K