5. You were recently hired to be a junior investment analyst in the largest investment house in the entire Car- ibbenn. During the final interview, you assured the interviewers that you are able to compare the fundamen- tals of a group of stock and make a reasonable judgment call on which to invest in. The interviewers never forgot and on your first day they provide you with the following table for three (3) beverage stocks: NONO YESS MAY Industry Averages Stock Ticker Closing Price (Last Week Friday) Opening Price (Last Week Monday) 30-day volatility $195 S102 N/A $188 $66.90 $66.70 3% $103 1% N/A 20% 8% PE ratio 10 5 19 15 Expected return (CAPM 52 Week High 3% 3% 0.3% N/A $220 $70 N/A $120 $91 52 Week Low $170 $44 N/A Risk Free Rate 0.1% 0.1% 0.1% 0.1% PTO QUESTIONS CONTINUES a) Your employers tell you to select which stock is the best if you were to employ a passive or active in- vestment style. State one (1) indicator you would use to assist you with an active investment decision and passive investment decision, respectively. Provide one rationale for the usage of the passive indi- cator. (5 MARKS) b) You are asked to use a contrarian investing approach and, therefore, are to choose which stock you would purchase and another to sell based on this approach. What two indicators would you use to as- sist you with this decision? Give one (1) reason why you would use each indicator. (10 MARKS) c) Your direct manager reminds you that there are two (2) additional indicators that would allow you to make trading decisions quicker if you adopt a trend investing approach. Some of these are not included in the table they provided to you. State those two (2) indicators and explain how you would use the two of them to "signal" when it is time to purchase a stock. (10 MARKS)