1. On August 24, 2022 the share price of Nordstrom Inc drifted downward from $23.20 (the previous days close) to $18.80 at 11.30 am PST - a fall of almost 20 percent. What news was the market reacting to and in your view was this an efficient market response?
2. Assume that financial markets are mostly efficient. Would you be more or less likely to engage in stock picking and market timing in managing your investment portfolio? Explain your reasoning briefly.
3. Assume that financial markets are strongly efficient in the sense that: "prices are always right". Comment on the following: Can you think of any effect this might have on the behavior of top corporate executives in terms of their effort and motivation?