Question 18

[5 points] Suppose you have the following information about a company:

Stock price is currently $570 per share. There are 100,000 number of shares outstanding. Operating Current Assets are $350,000. Operating Current Liabilities are $120,000

Given this information, the NET OPERATING WORKING CAPITAL for this company is:

(a) $57,000,000 (b) $470,000 (c) $450,000 (d) $230,000 (e) Not possible to calculate given this information.

Directions: This is a multiple choice question.

Question 19

[5 points]

If you strongly believe in the Efficient Market Hypothesis, which trading strategy are you MOST LIKELY to utilize?

(a) An active trading strategy where you actively buy and sell index portfolios like the S&P 500. (b) A passive trading strategy where you buy and hold index portfolios like the S&P 500. (c) A trading strategy that uses technical indicators but not fundamental indicators. (d) A trading strategy that invests in growth firms but not value firms.

(e) A trading strategy that invests in value firms but not growth firms. Directions: This is a multiple choice question.

Question 20

[5 points]

For this question, refer to the Excel file with the tab "Question 20." This tab contains the daily closing prices for Tesla and the SPY (S&P 500 index), respectively. The data sample is from January 3, 2022 until June 29, 2022. The risk-free rate is zero over the sample period.

Which of the following statements BEST describes the alpha for Tesla for the available sample range:

(a) Tesla's alpha is -1.80 and is statistically insignificant given the t-statistic. (b) Tesla's alpha is -0.50 and is statistically significant given the t-statistic. (c) Tesla's alpha is 1.41 and is statistically significant given the t-statistic. (d) Tesla's alpha is 1.97 and is statistically insignificant given the t-statistic. (e) Tesla's alpha is 2.01 and is statistically significant given the t-statistic. (f) Tesla's alpha is 2.62 and is statistically insignificant given the t-statistic. (g) Tesla's alpha is near zero and is statistically insignificant given the t-statistic.

Directions: This is a multiple choice question. Use the market model to estimate alpha.

Date	Closing Price for Tesla	Closing Price for SPY
1/3/22	1199.780029	477.709991
1/4/22	1149.589966	477.549988
1/5/22	1088.119995	468.380005
1/6/22	1064.699951	467.940002
1/7/22	1026.959961	466.089996
1/10/22	1058.119995	465.51001
1/11/22	1064.400024	469.75
1/12/22	1106.219971	471.019989
1/13/22	1031.560059	464.529999
1/14/22	1049.609985	464.720001
1/18/22	1030.51001	456.48999
1/19/22	995.650024	451.75
1/20/22	996.27002	446.75
1/21/22	943.900024	437.980011
1/24/22	930	439.839996
1/25/22	918.400024	434.470001
1/26/22	937.409973	433.380005
1/27/22	829.099976	431.23999
1/28/22	846.349976	441.950012
1/31/22	936.719971	449.910004
2/1/22	931.25	452.950012
2/2/22	905.659973	457.350006
2/3/22	891.140015	446.600006
2/4/22	923.320007	448.700012
2/7/22	907.340027	447.26001
2/8/22	922	450.940002
2/9/22	932	457.540009
2/10/22	904.549988	449.320007
2/11/22	860	440.459991
2/14/22	875.76001	439.019989
2/15/22	922.429993	446.100006
2/16/22	923.390015	446.600006
2/17/22	876.349976	437.059998
2/18/22	856.97998	434.230011
2/22/22	821.530029	429.570007
2/23/22	764.039978	421.950012
2/24/22	800.77002	428.299988
2/25/22	809.869995	437.75
2/28/22	870.429993	436.630005
3/1/22	864.369995	429.980011
3/2/22	879.890015	437.890015
3/3/22	839.289978	435.709991
3/4/22	838.289978	432.170013
3/7/22	804.580017	419.429993
3/8/22	824.400024	416.25
3/9/22	858.969971	427.410004
3/10/22	838.299988	425.480011
3/11/22	795.349976	420.070007
3/14/22	766.369995	417
3/15/22	801.890015	426.170013
3/16/22	840.22998	435.619995
3/17/22	871.599976	441.070007
3/18/22	905.390015	444.519989
3/21/22	921.159973	444.390015
3/22/22	993.97998	449.589996
3/23/22	999.109985	443.799988
3/24/22	1013.919983	450.48999
3/25/22	1010.640015	452.690002
3/28/22	1091.839966	455.910004
3/29/22	1099.569946	461.549988
3/30/22	1093.98999	458.700012
3/31/22	1077.599976	451.640015
4/1/22	1084.589966	452.920013
4/4/22	1145.449951	456.799988
4/5/22	1091.26001	451.029999
4/6/22	1045.76001	446.519989
4/7/22	1057.26001	448.769989
4/8/22	1025.48999	447.570007
4/11/22	975.929993	439.920013
4/12/22	986.950012	438.290009
4/13/22	1022.369995	443.309998
4/14/22	985	437.790009
4/18/22	1004.289978	437.970001
4/19/22	1028.150024	445.040009
4/20/22	977.200012	444.709991
4/21/22	1008.780029	438.059998
4/22/22	1005.049988	426.040009
4/25/22	998.02002	428.51001
4/26/22	876.419983	416.100006
4/27/22	881.51001	417.269989
4/28/22	877.51001	427.809998
4/29/22	870.76001	412
5/2/22	902.940002	414.480011
5/3/22	909.25	416.380005
5/4/22	952.619995	429.059998
5/5/22	873.280029	413.809998
5/6/22	865.650024	411.339996
5/9/22	787.109985	398.170013
5/10/22	800.039978	399.089996
5/11/22	734	392.75
5/12/22	728	392.339996
5/13/22	769.590027	401.720001
5/16/22	724.369995	400.089996
5/17/22	761.609985	408.320007
5/18/22	709.809998	391.859985
5/19/22	709.419983	389.459991
5/20/22	663.900024	389.630005
5/23/22	674.900024	396.920013
5/24/22	628.159973	393.890015
5/25/22	658.799988	397.369995
5/26/22	707.72998	405.309998
5/27/22	759.630005	415.26001
5/31/22	758.26001	412.929993
6/1/22	740.369995	409.589996
6/2/22	775	417.390015
6/3/22	703.549988	410.540009
6/6/22	714.840027	411.790009
6/7/22	716.659973	415.73999
6/8/22	725.599976	411.220001
6/9/22	719.119995	401.440002
6/10/22	696.690002	389.799988
6/13/22	647.210022	375
6/14/22	662.669983	373.869995
6/15/22	699	379.200012
6/16/22	639.299988	366.649994
6/17/22	650.280029	365.859985
6/21/22	711.109985	375.070007
6/22/22	708.26001	374.390015
6/23/22	705.210022	378.059998
6/24/22	737.119995	390.079987
6/27/22	734.76001	388.589996
6/28/22	697.98999	380.649994
6/29/22	685.469971	380.339996