Tonga Bemba Plc has the following statistics on its portfolio investment.

Year Annual Rate of Return

$201711\%$

$20187\%$

$2019-6\%$

$202012\%$

$20214\%$

Required

A$.$ Calculate the standard deviation $(\backslash$delta $)$ for the portfolio of Hichilema Lungu Plc$.(10$ Marks$)$

B$.$ Assuming that Hichilema Lungu Plc were contemplating diversifying further into a new

investment with a standard deviation $(\backslash$delta $)$ of $0\mathrm{.}09$ and an expected return of $0\mathrm{.}10.$ Using

supporting calculations, advise management as to whether the company should diversify

or not. $(10$ Marks$)$

C$.$ Discuss the conditions under which a standard deviation $(\backslash$delta $)$ and a coefficient of variation

$($CV$)$ can be used.