Reference no: EM132672528

Problem 1: In the above TSLA example, monthly prices vary wildly and monthly returns as well. Which of the two variables are you supposed to focus on, and why?

Option 1: Return because regardless of the price level, return on a certain asset can be easily compared with returns on other assets as an indicator of performance.

Option 2: Price because regardless of the returns level, price of a certain asset can be easily compared with prices of other assets as an indicator of performance.

Option 3: Return because regardless of the returns level, price of a certain asset can be easily compared with prices of other assets as an indicator of performance.

Option 4: Price, because regardless of the price level, return on a certain asset can be easily compared with returns on other assets as an indicator of performance.

Problem 2: In the above TSLA example what is the geometric AVG return or AVG monthly growth rate of Tesla stock over the last 6 months period ending in August 2020? ________ % (Answer must be in % showing only the number rounded to the nearest 100th or 2nd decimal place, without the "%".)

Problem 3: Which of the following is not the reason why interest rate is the base line of all ROI's throughout the entire macroeconomy?

Option 1: Interest rate is the highest possible return on the money without taking any risk.

Option 2: Interest rate is the riskless return on the money.

Option 3: Interest rate is the lowest possible return on the money for taking any possible risk.

Option 4: Interest rate is the risky return on the money for taking no risk.