Question 5\ Answer the following questions:\ a) In the constant growth model, what do you think is the growth rate of share price? Briefly explain. [2 marks]\ b) John said that the variances of the individual assets in a well-diversified portfolio is the most important factor determining the expected return on the portfolio. Do you agree or disagree with him? Briefly explain. [1 mark]\ c) What is the relationship between the yield of a bond and its price? [1 mark]\ d) What is the difference between the coupon rate and the bond yield? [1 mark]

Answer the following questions: a) In the constant growth model, what do you think is the growth rate of share price? Briefly explain. [2 marks] b) John said that the variances of the individual assets in a well-diversified portfolio is the most important factor determining the expected return on the portfolio. Do you agree or disagree with him? Briefly explain. [1 mark] c) What is the relationship between the yield of a bond and its price? [1 mark] d) What is the difference between the coupon rate and the bond yield? [1 mark]