Question

1. if the one - day performance of super duper stock shows a - 11.4% return, what can you assume about the longer - term historical performance of their stock?

• super duper has likely been struggling financially for months or even years
• share prices for super duper fluctuate regularly and and only high risk investors should have this company anywhere in their portfolio
• one - day returns are far too short a time frame to make any assessment about past or future performance of super duper
• historically, super duper must have been much more successful or their shares wouldnt even be eligible to trade on the stock market

1. if you want to maximize your investment returns, which of these suggestions would be the worst advice?

• make frequent trades and withdraw your short - term earnings
• start to invest early for the long - term
• reinvest earnings
• use diversification and allocation to minimize risk

Explanation:

For question 3: A single day's stock return is a very narrow, short-term data point. It does not provide enough evidence to draw conclusions about long-term historical performance, as stock prices can fluctuate for many temporary reasons (like market news, short-term sentiment) that don't reflect sustained financial performance.
For question 4: Frequent trading incurs high transaction costs, and withdrawing short-term earnings misses out on the power of compounding. The other options (investing early, reinvesting earnings, diversification) are all evidence-based strategies to boost long-term returns, making frequent trading with short-term withdrawals the worst advice.

Answer:

1. One-day returns are far too short a time frame to make any assessment about past or future performance of Super Duper
2. Make frequent trades and withdraw your short-term earnings