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1. (15 points) What is the market efficiency paradox (or, Grossman-Stiglitz paradox)? Please explain briefly (4-5 lines). 2. (15 points) What is a random walk

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1. (15 points) What is the market efficiency paradox (or, Grossman-Stiglitz paradox)? Please explain briefly (4-5 lines). 2. (15 points) What is a random walk model of stock prices? Why are markets efficient when stock prices follow a random walk? Please explain briefly (4-5 lines)

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