Provide a brief explanation to each of the classification of shares provided below:

(i) Growth shares (3 marks)

(ii) Income shares (3 marks)

(iii) Blue chip shares (3 marks)

(iv) Speculative shares (3 marks)

(v) Cyclical shares (3 marks)

(vi) Defensive shares (3 marks)

(b) In each case identify and explain your view on the kind of investor you would expect to invest in that kind of shares. (2 marks)

Question Two

The curvature of the bond price yield curve has been explained to be caused by three basic theories or hypotheses, namely

a) Liquidity preference theory

b) Market segmentation hypothesis

c) Expectation hypothesis

Explain each of the above and how they influence the price-yield curve (20 marks)