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A. Why is market efficiency a good thing for investors? (5 marks) B. Describe two style-based anomalies and give your opinion on why they persist?
A. Why is market efficiency a good thing for investors? (5 marks) B. Describe two style-based anomalies and give your opinion on why they persist? Said another way, given that people know they exist why do they not disappear? (5 marks) C. What is Prospect Theory? Explain how it affects investors' decision-making process. (5 marks) D. If an investment has a Sharpe ratio of 2, what is this telling us? Explain why the Sharpe Ratio is an important metric in finance
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