4. History shows that markets are not efficient and market returns are not normally distributed. Which of the following statement regarding the market is incorrect?

1. Investments can become overvalued or undervalued in short periods of time
2. Over long investment horizons, Developed markets should provide lower returns compared with Emerging markets.
3. Fat tails imply that extreme market events are more likely to happen than predicted by a normal distribution.
4. Some investments in the market remain mispriced for long periods of time
5. Investment returns are appropriate for the level of risk of that investment.