Shengo Kaweche had bought shares in Guild Limited a company listed at Lusaka Securities

Exchange and Soweto Inc. a Johannesburg Stock Exchange listed company. The following

data shows the returns earnings of the two companies over a period of five $(5)$ years.

YEAR GUILD LIMITED SOWETO INC.

$\%\%$

$157$

$286$

$389$

$41011$

$51312$

Required

Calculate the covariance and the correlation coefficient and interpret the two statistics in

relation to the two investments $(13$ Marks$)$

B$.$ Discuss the role of Primary Capital Markets and briefly explain the Private Placement,

Negotiated Transactions, Competitive Bidding and Rights Issues as methods used in the

primary market to issue securities$.$