1. You are an analyst for a managed mutual fund. You have been given the task of investigating whether any significant relationship exists between a companys profitability (ROE) and its environmental, social and governance (ESG) ratings and management (CEO) turnover. A regression is performed with ROE (in percent) as the dependent variable and CEO tenure (in years) and ESG rating as the independent variables. A sample of 40 large cap companies was used. The regression results are given below

	Coefficient	Standard Error	t-Stat	p-Value
Intercept	9.442	3.343	2.824	0.008
ESG	0.069	0.058	1.201	0.238
Tenure	0.681	0.295	2.308	0.027
ANOVA	SS	MSS	F	Significance F
Regression	240.410	120.205	4.161	0.023
Residual	1069.000	28.892
Total	1309.410
Multiple R	0.428
R2	0.183
Adjusted R2	0.139

3. You are an advisor at a consulting firm that provides advice to a select group of individual investors with large portfolios. During the firms weekly management meeting, the following questions about economic indicators were addressed to you. In 4-5 sentences per question, provide your answers.

1. Why does the federal funds rate matter to stock prices? How do low rates impact stock prices?
2. Some of your associates doubt that there is a strong relationship between the stock market and the economy because they heard that stock prices typically turn before the economy does. Do you agree? (This is a different question so please read it thoroughly and answer it correctly)