Reference no: EM132640563

Given below is hypothetical data on two stocks on the Lusaka Stock. Excahnge and the market data (All Lusaka Share Index). The market data already includes dividends paid during the year.

                    Stock 1                                               Stock 2 Market Index
Year      Stock Price(K)      Dividend(K)       Stock Price(K)        Dividend(K) (Includes Dividends)
2013:   25.88                       1.73                73.13                    4.50                 17,495.97
2012:   22.13                        1.59                  78.45                 4.35                 13,178.55
2011:   24.75                         1.50                 73.13                 4.13                 13,019.97
2010:    16.13                        1.43                  85.88                 3.75                 9,651.05
2009:    17.06                         1.35                  90.00               3.38                  8,403.42
2008:     11.44                         1.28                  83.63               3.00                  7,058.96

Required:

showing your formula

Question 1: Determine and explain the following for each security

1. The appropriate Annual Average Return
2. The Total risk exposure 
3. The Downside deviation (Semi deviation) 
4. The relationship between Stock 1 and the market, as well as Stock 2 and the market.