Question 4

(a) The investment management process describes how an investor should go about making decisions and it can be explained by a five-step procedure. Explain in detail the five-step process. 10Marks

(b) Kharis has two investments, A and B.

	Investment A	Investment B
Expected return	0.07	0.12
Standard deviation	0.05	0.07

Required: Estimate the coefficient of variation for the investments 3Marks

(c) Distinguish between defensive stocks and cyclical stocks 3 Marks

(d) Explain the Efficient Market Hypothesis (EMH) 4 Marks