The purpose of firms is to grow the pie of the shareholders' wealth. By doing so, the management should make the best decisions for its financing and investing to create value in shareholders' interest. Thus, the information pertaining to firm's financial decisions should be incorporated into its current stock price. As a junior fund manager, you are tasked to analyse the possible value of firms' information in your investments. Required: (a) You believe that both financing and investing decisions contain new information of firm value perceived by the investors. Thus, stock price reacts positively or negatively to it. List three decisions each for financing and investing made by the firms. (7 marks) (b) If you believe Capital Asset Pricing Model (CAPM) is true on pricing the risky securities, what would be the impact of firm's decisions on your investment value? (8 marks) (c) Hedge fund managers believe that event-driven investment strategy, i.e. announcements of firm's financing and investing decisions, could possibly generate abnormal or excess portfolio return. Do you agree with this statement and why? State your assumptions when necessary