6

The strongest form of the efficient market hypothesis, is illegal in many countries, including the United States. The strong form of EMH states:

A Market is fully efficient when market prices instantly reflect all past price information, all publicly available information and all PRIVATELY held information.

a) In 80 characters or less, make one argument supporting the idea to keep insider trading illegal.

b) In 80 characters or less, make one argument supporting the idea to make insider trading legal.

Foreign Portfolio #1

Returns

Malaysian Investor in Japan

Holding Period: 15-Sep to 10-Nov

Enter all solutions with the appropriate identifier, e.g. %, X

7

Begin an evaluation of the FP#1 return parameters by determining the capital gain or loss on theMalaysian investor's long margined position in Mitsui stock, i.e. pfs#1?

8

What is the Malaysian investor's dividend yield on the long margined position in Matsui stock,d#1?

9

The Malaysian investor will need the currency quote for fx#1, expressed as:

MYR/USD

JPY/USD

MYR/JPY

JPY/MYR

10

The currency position for the Malaysian investor is initially establish as:

Short

Long

11

Show the Malaysian investor's gain or loss on the investment in the foreign currency, fx#1.

12

The solution to the currency return, fx#1, indicates that the JPY has __________ against the MYR.

Depreciate

Appreciate

13

Determine the Malaysian investor's return on FP#1 after converting back to domestic currency.

Kuala Mitsui in Mitsui in Nikki 400 taJPY () Ringgit (RM) Index MYR/US MYR FX JPY FX Index Index Lumpur JPY/USD Index 0 15-Sep 6290.69314.535 1962.871768.1195.814.2815 85.63591.68 122-Sep6,616.14330.8071999.491782.9193.15 45345 84.89291.78 229-Sep 7,070.38353.519 2016.421732.4490.644.5161 84.016 91.9 3 6-Oct 6,539.13 326.956 1964.161717.25 96.27 4.897985.839 91.65 520-Oct6,390.70 6 27-Oct6,547.04 91.39 91.35 8 10-Nov 6714.84 .742 2035.92 1793.52 101.33 4.7866 80.635 92.42 Japanese Malaysian MYR Malaysian ringgit JPY Japanese yen Stock Index Stock