a. In the financial market in general, the securities and funds management industry relies on trust and confidence to keep its relevance. Similarly, personal conduct by professionals in the industry is equally important. As a newly employed at the Association of Ghana Securities Professionals, you have been tasked with the following assignment; you have been tasked with the following assignment.

i. Draft a code of personal conduct, justifying five areas, for professionals in the Securities and Funds Management industry of Ghana. (12 marks)

ii. Discuss four reasons for a policy statement in Financial Investment.

(8 marks)

iii. A 40-year-old civil servant client of yours is 20 years away from retirement; A 35-year-old self-employed also needs an investment policy statement. In writing their investment policy statement how might their investment policy statements differ? (7 marks)

b. Yourbrokersuggeststwostocksasgoodtopurchase;stockGAABandstock PUFF. The two stocks each pay a GHS 1.5 dividend that is growing annually at 9 percent. Stock GAAB has a beta of 1.4 while stock PUFFs beta is 0.85.

i. Which stock is more volatile and why?

ii. If treasury bills yield 8 percent and you expect the market return to rise by

15.5 percent, what is your risk-adjusted required rate of return?

iii. Using the dividend-growth model, what is the maximum amount you would

be willing to pay for each stock?

iv. Why are your valuations different? (7 marks)

c. Distinguishbetweenfinancialassetsandrealassetsforeachofthefollowing characteristics.

i. Divisibility

ii. Marketability

iii. Holding period

iv. Information availability