1. Explain what is meant by efficient market theory and discuss some of its implications for corporate financial management. (25 marks)
2. ‘Even in an efficient market it is still valid to seek out a “favourable” rate of return from an equity investment.’
Consider the argument that, in an efficient market ‘one security is as good as any other’.
(25 marks)
3. Explain how behavioural finance can provide insights to corporate financial managers.
(25 marks)
4. What strategies can financial managers follow if they believe behavioural finance is a valid hypothesis?(25 marks)