The common stock of SMD has a daily standard deviation of stock price returns 75 basis points (0.75%). On a certain day, call it day 0, P-Rod Toys announces the launch of a new product line. You have been asked to evaluate whether the announcement was well received by the market. You decide to perform an event study. The expected return on the market portfolio is 2 basis points a day (0.02%). An abnormal return is considered statistically significant if it is larger than 2 standard deviations in absolute value.

Based on the stock price information given, the announcement return is:

Day relative to announcement	Stock price
-4	30.00
-3	30.33
-2	30.48
-1	30.30
0	31.21
1	31.52
2	31.27
3	31.14

Group of answer choices

Negative and statistically significant

Positive and statistically significant

Not statistically different from zero

There is not enough information to answer the question

From the announcement return, the most reasonable conclusion about market efficiency is that:

Group of answer choices

Market are strong-form efficient because the price drifts slowly upwards from the announcement

Markets are not semi-strong form efficient because the news leaks out early

Markets appear semi-strong form efficient as the price reaction happens on the day of the announcement

Market are inefficient at all levels because the price drifts slowly upwards from the announcement