Which of the following is/are inconsistent with the semi-strong form of the efficient market hypothesis? [I] Significant abnormal profits over a long time [II] Price overreaction over a long time period to the public release of new information [III] Superior performance of professional traders [IV] Abnormal profits from illegal insider trading Question options:

1) I and III

2) II and IV

3) II, III, and IV

4) I and II

5) All are inconsistent with the semi-strong form of the EMH

(option 1 is wrong)

If you find that stock prices consistently go up for two days after declining for three days,

Question options:

1) the market is inefficient in the weak form

2) the market is inefficient in the semi-strong form

3) Markets are efficient in the strong form though not in the weak form

4) Nothing can be concluded about market efficiency

5) None of the above

(option 4 is wrong)

FOR THIS AND THE NEXT TWO QUESTIONS. The following estimates are for a firm that has just announced the launch of a new revolutionary product. Calculate the MEAN ADJUSTED ABNORMAL RETURN on Day 0.

Beta: (from estimation period)	0.74
Intercept: (from estimation period)	0.015
Average return (from estimation period)	0.08%
Day 0 stock return	0.15%
Day 0 market return	0.07%

Question options:

1)

8.32%

2)

7%

3)

8%

4)	None of the above (this option is wrong)

Calculate the RISK ADJUSTED ABNORMAL RETURN on Day 0

Question options:

1)

8.32%

2)

7%

3)

8%

4)	None of the above (this option is wrong)