a. What are the three forms of market efficiency we have learned about and how are they defined.

b. You have discovered a profitable trading strategy that allows you to consistently make abnormal returns in the stock market. The strategy is remarkably simple: Buy a stock after it has gone up by 10%. Sell it after it has gone down by 10%. Is this consistent with weak form market efficiency? Why or why not?

c. When a firm announces an unusual increase in earnings, what do you expect the stock price reaction to be on the day of the announcement if markets are strong form efficient with respect to this announcement? Explain