Question $1$

a$)$ Briefly explain the role of capital markets in the smooth operations of agribusinesses in

Zambia. $(10$ Marks$)$

b$)$ Briefly explain the use of the capital asset pricing model $($CAPM$)$ in financial

management. $(5$ Marks$)$

c$)$ Given that the expected rate of return on the market $($KM$)$ is $11\%$; riskless rate $($Krf$)$ is

$3\mathrm{.}5\%$; standard deviation of the market $(\backslash$sigma M$)$ is $15\%$ and the beta for stock of Mushiya

Company is $0\mathrm{.}3.$ What is the expected rate of return for Mushiya.