Question 1 (EMH) Suppose a company announces a good news that it is going to implement a 'fantastic' project that will generate an NPV of $100 million. If the company has 100 million of shares outstanding, its share price after the announcement of the news should increase by ($100 million /100 million shares )=$1/ share within a day after announcement. However, if the share price only gradually increases by an average of $0.20 per day, it will take 5 days in total to fully reflect the information i) Can you profit from this information if you buy the stocks by the end of the third day? ii) How much will you be able to profit from your trading based on this info? iii) What is your conclusion regarding the efficiency of the market? Does the market have weak form efficiency