Questions You just graduated with MBA in Accounting and Finance from the University of Professional Studies and are employed by JEK Investments Ltd, a brokerage firm in Ghana. Kweku The Don, an illiterate businessman, visited your firm for a piece of investment advice and possibly make some investments. Although an accomplished businessman, he was advised by his son to buy some shares on the Ghana Stock Exchange in other to diversify his portfolio. Your boss has asked you to consider either Cronox Industries or Zealous Incorporated The share prices and dividends for the two companies and the returns on the Ghana Stock Exchange are shown below for the period 2016-2021. Year GSE Returns (Market Returns) 2016 2017 2018 2019 2020 2021 Cronox Industries Zealous Incorporated Stock price Dividend Stock price Dividend (GH) (GH) 7.62 55.75 12 0.90 60.00 2.25 10.75 0.95 57.25 2.50 17 1.00 48.75 2.75 15.75 1.06 52.30 2.90 17.25 1.15 48.75 3.00 0.07 0.12 0.08 0.23 0.18 I a. Based on your understanding of Risk and Return in Financial Management, explain to Kweku The Don what portfolio means in simple terms and why he should heed his son's advice. b. Use the data given to calculate the annual returns for Cronox, and Zealous using 2016 as the base year. C. Compute the average returns (Arithmetic Average) for each of the stocks over the five-year period (2017-2021) d. Calculate the risk (standard deviation of returns) for both Cronox and Zealous. Questions You just graduated with MBA in Accounting and Finance from the University of Professional Studies and are employed by JEK Investments Ltd, a brokerage firm in Ghana. Kweku The Don, an illiterate businessman, visited your firm for a piece of investment advice and possibly make some investments. Although an accomplished businessman, he was advised by his son to buy some shares on the Ghana Stock Exchange in other to diversify his portfolio. Your boss has asked you to consider either Cronox Industries or Zealous Incorporated The share prices and dividends for the two companies and the returns on the Ghana Stock Exchange are shown below for the period 2016-2021. Year GSE Returns (Market Returns) 2016 2017 2018 2019 2020 2021 Cronox Industries Zealous Incorporated Stock price Dividend Stock price Dividend (GH) (GH) 7.62 55.75 12 0.90 60.00 2.25 10.75 0.95 57.25 2.50 17 1.00 48.75 2.75 15.75 1.06 52.30 2.90 17.25 1.15 48.75 3.00 0.07 0.12 0.08 0.23 0.18 I a. Based on your understanding of Risk and Return in Financial Management, explain to Kweku The Don what portfolio means in simple terms and why he should heed his son's advice. b. Use the data given to calculate the annual returns for Cronox, and Zealous using 2016 as the base year. C. Compute the average returns (Arithmetic Average) for each of the stocks over the five-year period (2017-2021) d. Calculate the risk (standard deviation of returns) for both Cronox and Zealous
