Mr$.$ Carlos Small is an entrepreneur who has done very well in business and would like to become an investor on the Jam Love Stock Exchange. Mr$.$ Small has never invested in a Stock Exchange before and is not knowledgeable of how it is operated and its functions. He has watched the Owen James Report on Television Jamaica for many years and is familiar with a few terms such as liquidity, stock advancing, stock declining, and stock trading firm but he does not know what they mean and how to read and understand the Stock Market Reports that are published in the major News Papers in the country. Mr$.$ Small was encouraged to speak with a stockbroker at VLC Investment Company. Mr$.$ Smith took the advice and visited VLC Investment Company where he met Mr$.$ Peter Brown, a stockbroker, who answered all his queries and concerns. Mr$.$ Peter Brown used a Stock Market Report to illustrate the following:

Security Volume

Traded Value

Traded High Low Change Close

Price Closing

Bid Closing

Ask

$ $ $ $ $ $ $

AFS $6,400192,00030\mathrm{.}0030\mathrm{.}002\mathrm{.}5030\mathrm{.}0030\mathrm{.}0032\mathrm{.}00$

BPG $14,520627,39050\mathrm{.}0040\mathrm{.}409\mathrm{.}5950\mathrm{.}0046\mathrm{.}5050\mathrm{.}00$

CAC$200024,800151,2806\mathrm{.}106\mathrm{.}10-0\mathrm{.}306\mathrm{.}106\mathrm{.}006\mathrm{.}10$

CFF $85,656779,9209\mathrm{.}508\mathrm{.}500\mathrm{.}669\mathrm{.}499\mathrm{.}059\mathrm{.}50$

CPJ $86,867373,2704\mathrm{.}504\mathrm{.}100\mathrm{.}414\mathrm{.}464\mathrm{.}454\mathrm{.}50$

CBJ $642,0912,067,6583\mathrm{.}702\mathrm{.}970\mathrm{.}793\mathrm{.}603\mathrm{.}603\mathrm{.}95$

DCL $8,697126,57914\mathrm{.}7414\mathrm{.}30-0\mathrm{.}7414\mathrm{.}7414\mathrm{.}0014\mathrm{.}74$

HBL $378,2812,650,8637\mathrm{.}496\mathrm{.}650\mathrm{.}007\mathrm{.}387\mathrm{.}207\mathrm{.}25$

JTL $128,1341,137,5929\mathrm{.}508\mathrm{.}500\mathrm{.}058\mathrm{.}658\mathrm{.}609\mathrm{.}00$

JCL $751,1537,735,65710\mathrm{.}509\mathrm{.}500\mathrm{.}0010\mathrm{.}489\mathrm{.}5010\mathrm{.}50$

LDL $1,056,1517,525,2947\mathrm{.}307\mathrm{.}00-\mathrm{.}0\mathrm{.}087\mathrm{.}307\mathrm{.}257\mathrm{.}30$

Required:

a$.$ Define liquidity and list Four $(4)$ factors that cause liquidity? $(4$ marks$)$

b$.$ List the four $(4)$ most liquid securities in the Table above? $(4$ marks$)$

c$.$ Explain the reason for a security to be considered liquid and list Five $(5)$ advantages of a security being liquid to an investor? $(7$ marks$)$

d$.$ Identify the stocks that are advancing, declining, and trading firm? $(10$ marks$)$

e$.$ As a prospective investor, explain whether the following are good or bad deals:

i$.$ CFF selling for $$15\mathrm{.}00.$

ii$.$ DCL selling for $$10\mathrm{.}00(5$ marks$)$

f$.$ Explain to Mr$.$ Small the steps required to have his business listed on the Love Stock Exchange? $(10$ marks$)$

g$.$ What are the benefits of the stock exchange to:

$-$ Mr$.$ Small business $(10$ marks$)$

$-$ The economy. $(10$ marks$)$

$-($Total $60$ marks$)$