QUESTION 1 (25 marks)

(a) State and explain the three types of the finance professionals. (6 marks)

(b) Describe the arbitrage-free market and the efficient market hypotheses. (4 marks)

(c) If no one can consistently profit in a stock market by analyzing the stocks historical prices unless he/she has access to some other public and private information of the company, this statement is an evidence of / support which level of the efficient market hypotheses? (3 marks)

(d) Explain if the market portfolio is efficient. (3 marks) (e) Elaborate on the two impacts of overconfidence. (4 marks)

(f) Define and provide an example of outcome bias. (5 marks

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