3. Suppose that, after conducting an analysis observations. Which would appear to contradict the weak form of the efficient market hypothesis? of past stock prices, you come up with the following A. One could have made higher-than-average capital gains by holding stocks with low dividend yields. B. One could have made superior returns by buying stock after a 10% rise in price and selling after a 10% fall. C. The correlation between the return during a given week and the return during the following week is zero. D. The average rate of return is significantly greater than zero. 4. Suppose that, after conducting an analysis of past stock prices, you come up with the following observations. Which would appear to contradict the semi-strong form of the efficient market hypothesis? A. Mutual fund managers do not on average make superior returns. B. You cannot make superior profits by buying (o: selling) stocks after the announcement of an abnormal rise. C. In any year approximately 50% of pension funds outperform the market. D. Low P/E stocks tend to have positive abnormal returns 5. Suppose that the optimal risky portfolio (tangency portfolio) has an expected return of 15% and standard deviation of 25%. The T-bill fund gives a riskfree return of 6%. How can you construct an efficient portfolio for your client Mr. Smith, with an expected return of 12%? A) invest 83.87% in the optimal risky portfolio and the rest in the risk free portfolio B) invest 66.7% in the optimal risky portfolio and the rest in the risk free portfolio C) invest 50% in the stock fund and 50% in the bond fund D) invest 57.8% in the stock fund and the rest in the risk free portfolio E) None of the above Mr. Smith wants to invest 80% in the optimal risky portfolio and the rest in the t-bill fund. uppose the optimal risky portfolio is consisted of 60% of stocks and 40% of bonds, what's the roportion invested in the stock fund for Mr. Smith? A) 8% 3) 12% ) 32% ) 48%