Stock Market Anomalies and Trading Strategies $(10$ points in total$)$

Part $($a$).$ Finance researchers have documented that many firm characteristics are associated with differences in average returns across stocks. The cross$-$sectional difference in average stock returns cannot be explained by the CAPM. Name three variables that can predict future stock returns, and explain why the relations between the variables and future stock returns are called "anomalies". $(4$ points$)$

Part $($b$).$ In a path$-$breaking work, Sloan $(1996)$ documents that firms with high accounting accruals earn abnormally low returns on average than firms with low accounting accruals. The phenomena is commonly referred to as the "accrual anomaly". If short sale is allowed, how can one form an investment strategy based on the accrual anomaly? $(2$ points$)$

Part $($c$).$ Investors can form various investment strategies based on market anomalies. In our class, two industry speakers and each student group have discussed investment strategies that can make abnormal positive average returns. Select one trading strategy discussed by the two industry speakers, or by another student group $($do not choose the topic discussed by your group$)$ in the following two aspects: $(1)$ what is the trading strategy and how to implement it$?(2)$ what is the investment philosophy behind the trading strategy and why does the strategy can generate high average return? $(4$ points$)$