There are two (2) parts to this question.Part 1 [5 Points]Take a look at the two charts below. In

There are two (2) parts to this question.

Part 1 [5 Points]

Take a look at the two charts below. In

both cases you can see daily relative price changes of stocks over more than 30 years. However, one is real while the other one is fake. Can you identify which chart is real and which one is fake? The fake one is generated with a classical finance model. Provide explanations for your choice relying on cues such as: how uniformly prices vary, the size of price changes within a range, extreme fluctuations, outliers or erratic price swings, and clusters.

Part 2 [5 Points]

Discuss how classical finance has been influenced by physics and why some recent scholars suggest viewing the financial market as a biological entity.

Please label each answer clearly in your response below.

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