The following information relates to X, Y, and Z as at 30 June 2021

Stock      Share price      Number of shares

X                10                 2,000,000

Y                 15                  6,000,000

Z                  20                      10,000,000

During the year the following activities occurred;

A two for one stock split on Y

Payment of 10% dividend on Z. It can be assumed that the entire dividend paid will be reinvested in shares of Z limited.

On 30 June 2022 the stock prices of X, Y and Z were sh 12, sh 10 and sh 20 respectively.

Required;

1. New index value given that the beginning value index is 100. (7 Marks)
2. Explain how secondary markets benefit investors. (3 Marks)
3. State and explain the main risks faced by financial institutions in the course of conduct of their business. (5 Marks)