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5. Interest rates and bond prices have an inverse relationship. a) Explain the causality in this inverse relationship. That is, does the causality run
5. Interest rates and bond prices have an inverse relationship. a) Explain the causality in this inverse relationship. That is, does the causality run from changes in interest rates to changes in bond prices or from changes in bond prices to changes in interest rates? b) Precisely explain the inverse relationship. 6. What two critical factors determine the market value of a a company's stock, or value of any asset? Write an equation showing these two critical factors, explaining each factor. 7. You have collected annual data for the five year period from September, 2018 to September 30, 2022 on Apple's stock price and the closing index value of the NASDAQ 100 stock market index. You are going to be analyzing these data. a) Suppose you invested $1,000 in AAPI. stock and $1,000 in a NASDAQ 100 Index ETF such as QQQ on September 30,2018. How much would each of your $1,000 investments be worth on September 30, 2022? b) What would be the Holding Period Returns on AAPL. and the QQQ100 Index ETF? c) What would be the Compound Annual Growth Rate (CAGR) for each investment?
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