QUESTION 1

Mr Twalibomba Kale is about to retire after an illustrious career in the Zambian civil service. He is expecting to receive a net of K2.5 million in retirement benefits. As an Investment Advisor, you have been approached by Mr Kale to advise on the options available for him to consider.

Required:

1. Advise on the main asset classes available in Zambia clearly showing the common investment time horizons for each.

[15 Marks]

2. Explain the difference between Direct and Indirect investment while clearly highlighting the main players under each approach.

[15 Marks]

3. Explain why preferred stock is referred to as a hybrid security.

[10 Marks]

Total 40 Marks