1. The Price of Fuddy Co. stock recently jumped when the sudden, unexpected death of the CEO was announced. What might account for such a market reaction?

2. According to the Efficient Markets Hypothesis, how might access to insider, non-public information give rise to unjust rewards/enrichment through the trading of securities? (Be sure to explicitly link your answer back to the Efficient Markets Hypothesis.)

3. A fixed-income security promises to pay $75 each year for the next five years. If pure discount bonds are selling for 0.93, 0.86, and 0.77 cents on the dollar for maturities of 1 year, 2 year, and 3 years, respectively, what is the price of the fixed income security? (Show work)