1. Please answer the following questions, justifying your answer:
   1. 'If the efficient-market hypothesis is true, then a mutual fund manager might as well select stocks randomly.' Do you agree with this statement?
   2. 'Past winner stocks are expected to be future losers.' Do you agree with this statement?
   3. 'Market efficiency is nonsense. Look at the Sequoia fund; it has had superior performance for each of the last 10 years.' Do you agree with this statement?
   4. It has been found that, on average, over the 60 days after the earnings announcement, the decile of stocks with surprisingly good news outperforms the decile with surprisingly bad news by an average of about 4%. This phenomenon is known as the 'post-earnings-announcement drift.' What is a possible explanation for this finding?
   5. Several studies find that stock returns exhibit momentum in the short term and reversals in the long term. Can you reconcile these two observations in a behavioural framework? Hint: Think how individuals would react to a new piece of information (eg, surprisingly good earnings) versus a series of good news for a company.