The Final Examination will be done in 3 stages:

1. The Term Project I needs to be submitted in module 6. Please refer to module 6 for the specifications.

This is the information for the term project in this course. This assignment will be due at the end of Module 6.

Please consider the questions below and use the tools you acquired in this course to answer them. Answer three questions. Show all the steps of your calculations. The term project should be no longer than 6 pages.

1) Nanotech, a microchip development and research firm, announced this morning that it has hired the worlds most knowledgeable researchers on nanotechnology. Before today, Nanotechs stock had been selling for $100. Assume that no other information is received over the next week and the stock market as a whole does not move.

a) What do you expect will happen to Nanotechs stock?

b) Consider the following scenarios:

(i) The stock price jumps to $118 on the day of the announcement. In subsequent days it floats up to $123, then falls back to $116.

(ii) The stock price jumps to $116 and remains at that level.

(iii) The stock gradually climbs to $116 over the next week.

Which scenario(s) indicate market efficiency? Which do not? Why?