The investment process describes how an investor should go about making decisions with regard to what marketable securities to invest in, how extensive the investment should be and when the investment should be made. A five step procedure for making these decisions form the basis for the investment process. These are: 1) Set investment policy, 2) perform security analysis, 3) Construct a portfolio, 4) Revise the portfolio and 5) Evaluate the performance of the portfolio. Discuss what is entailed in each step (10 marks)

b) List the limitations of the black and scholes option valuation model