1. Which of the following is a consistent strategy with a belief in the efficient market hypothesis?

a. Waiting to purchase a stock until it increases above the 40-day moving average.

b. Searching for undervalued securities.

c. Comparing the calculated value of a security, through fundamental analysis, to the market value of stock.

d. Selecting a random set of stocks for a portfolio.

2. An analyst has just received new information regarding his investment in a particular stock. The new information conflicts with his earlier forecast of what the stock price should be in that it is lower than his forecast. However, he is not willing to integrate the new information into his forecast and to revise it accordingly. Which behavioral trait best describes the analyst's actions?