3.3A Which Stocks do I Buy

​3.3A Which Stocks to Buy

Multiple Choice

Assuming this chart represents the entire market, how many stocks are in the market?

• 1

• 3

• 4

• 500

Multiple Choice

What was the share price of AVO on 1/1/2023?

• $100

• $109

• $110

• $112

Multiple Choice

What percent did the entire market go up in 2023? (Remember that this chart covers the entire market)

• 9%

• 10%

• 11%

• 12%

Multiple Choice

How many of the stocks beat the market average?

• 0

• 1

• 2

• 3

Multiple Choice

The amount by which a stock beats the average is defined as alpha. In dollars, what was the alpha of CARR in 2023?

• $0

• $1

• $2

• $3

Multiple Choice

In dollars, what is the sum of the alpha of all the stocks for 2023?

• $-2

• $0

• $3

• $5

​CARR beat the market by $2, while AVO and BROC both lost to the market by $1. Losing to the market is -$1 of alpha. If you add them up you get zero.

$2 - $1 - $1 - $0.

Multiple Choice

If CARR finished the year at $115 instead of $112, what would be the sum total of alpha of all the stocks? Hint: The average would change

• $-2

• $0

• $3

• $5

Multiple Choice

If you wanted to buy a share of AVO and today’s price is $109, but you happened to somehow know FOR SURE that the price would drop to $80 tomorrow. What’s the most you should be willing to PAY for the share?

• $80

• $100

• $109

• $110

Multiple Choice

If you owned a share of CARR, currently priced at $112 and you somehow happened to know for sure that tomorrow the price would jump to $130, what is the LEAST you would be willing to SELL your share for?

• $80

• $100

• $112

• $130