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Gandalf has emailed you the following stock information on two of the firm's major holdings, OCBC Bank and Tesla. It contains historical data on
Gandalf has emailed you the following stock information on two of the firm's major holdings, OCBC Bank and Tesla. It contains historical data on the stock price changes, OCBC dividend payout, and the USD/SGD exchange rate over the period. ALL NUMBERS ARE AT YEAR-CLOSING AND ADJUSTED FOR STOCK SPLITS WHEN 2017 2018 2019 2020 2021 2022 RELEVANT STOCK PRICE OCBC (SGD) TESLA (USD) DIVIDENDS OCBC (SGD) TESLA (USD) USD/SGD EXCHANGE RATE USD/SGD 9.79 9.19 9.34 9.13 10.55 11.79 20.76 21.19 27.89 235.22 352.26 123.18 0.36 0.39 0.48 0.44 0.41 0.56 1.3378 1.36615 1.34818 1.32294 1.35891 1.34352 (a) (b) Compute the annual returns of the two (2) stocks in SG dollar terms for the years 2018- 2022. For this computation, make sure to distinguish the price return from the dividend return and the foreign exchange gain (or loss) percentage on the Tesla share. Compare the returns of OCBC and Tesla by using successively the arithmetic and the geometric approach, then examine in less than two hundred (200) words (including any cited reference), the different results you can observe across the two return methods. For this comparison, make sure to compute the cumulative and average annualised returns for the two (2) stocks separately over the last two (2), and five (5) years.
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