Firms A and B are involved in a lawsuit. Suppose that investors expect that there is a $50\%$ chance that the judge will rule in favor of Firm A $($in which case Firm B will have to pay Firm A $$50$ million$),$ and a $50\%$ chance that the judge will rule in favor of Firm B $($in which case there will be no payments required by either party$).$ The judge's decision becomes publicly available on March $9$ in the morning. assume instead that A$\text{'}$s and B$\text{'}$s returns on March $9$ are $5\%$ and $3\%,$ respectively. Assume, in addition, that there is no other firm$-$specific information about either of the two firms that becomes publicly available on March $9.$ Can the observed returns of $5\%$ and $3\%$ be consistent with rational markets? If so$,$ why? If not, why not?