Assume that the Closing prices for Lafarge Zambia PLC , Real Estate Zambia (REZ) Plc and the LuSE Market index for the years 2006 to 2021 are shown below.

Year	Larfage	REZ	Market Inde
2021	12.38	1.35	75.75
2020	5.30	2.18	69.50
2019	4.49	2.79	54.99
2018	2.01	3.11	71.76
2017	0.67	3.10	82.52
2016	0.45	2.93	91.83
2015	0.68	3.32	76.83
2014	0.47	3.05	60.65
2013	1.61	3.95	46.30
2012	0.64	2.32	38.50
2011	0.21	1.98	28.70
2010	0.33	1.36	29.15
2009	0.50	0.90	27.23
2008	0.60	0.59	26.07
2007	0.45	0.94	20.64
2006	0.90	0.67	22.09

a). Calculate the total returns for Lafarge Zambia PLC , Real Estate Zambia stock for the years 2006 to 2021.

b). Assume that similar returns will continue in the future. Calculate the expected return, variance and standard deviation for Lafarge Zambia PLC and Real Estate Zambia .

c) You have been approached by a client Bupe who is middle aged and interested in buying shares in one of the companies at LuSe. Basing on the life cycle theory which of the two stocks will you recommend to your client Bupe(explain)

d. Calculate the covariance between Lafarge Zambia PLC and Real Estate stocks based on the 15 years of returns and interpret

e. As an investment specialist you think it will be better for Bupe to combine Lafarge Zambia PLC, and Real Estate stock. Using the 6 different proportions that could be combined to constitute of the portfolio ranging from 0% to 100% in 20% increments, calculate the portfolio variance, standard deviation and expected return.

f. Plot the tradeoff between return and risk and advise Bupe on the possible portfolio to invest in

g.From you investment theory you think it will be more beneficial to consider the market index performance and the Bank of Zambia(BOZ) treasury bills rates which is at 5%. Calculate the risk premium and interpret

h) Assume that you can form a portfolio consisting of 50% weight in either Lafarge or REZ stock ,30%

in the market stock and 20% in the treasury bills. Using the concepts of the capital market theory advice which combination will be better between these two combinations

i) 50% weight in Lafarge , 30% in the market stock and 20% in treasury bills or ii) 50% weight in REZ stock 30% ,in the market stock and 20%