1. Under the efficient market hypothesis, what is the assumption about the processing of new information, and what effect does this have on security pricing?

2. What does the weak form of the efficient market hypothesis suggest? What are the two major ways in which it has been tested?

3. Would low correlation coefficients over time between stock prices tend to prove or disprove the weak form of the efficient market hypothesis?

4. Under the semistrong form of the efficient market hypothesis, is there anything to be gained from a corporate treasurer changing accounting methods to increase earnings per share when there is no associated economic benefit or gain?