On the 22nd of October, the company revealed weak earnings through their quarterly report announcement. This low level of earnings fell far under the market consensus prior to the announcement. Knowing that this announcement was coming, key executives at ALD sold large parcels of shares in the 2-3 days prior to the announcement.

What kind of market efficiency does this represent? (1 mark)

Draw a graph with Cumulative Abnormal Return (CAR) on the vertical axis, and days relative to the 22^nd of October on the horizontal axis which would reflect such an information environment, assuming the total impact of the announcement should be a 10% decline in fair value. (1 mark)