WILCqudry Skilleu! (13.3 The Be The Behavior of Individual Investors 8. Why does the CAPM imply that investors should trade very rarely? 9. Your brother Joe is a surgeon who suffers badly from the overconfidence bias. He lo trade stocks and believes his predictions with 100% confidence. In fact, he is uninform most investors. Rumors are that Vital Signs (a startup that makes warning labels in the industry) will receive a takeover offer at $20 per share. Absent the takeover offer, the trade ar $15 per share. The uncertainty will be resolved in the next few hours. You believes that the takeover will occur with certainty and has instructed his broker stock at any price less than $20. In fact, the true probability of a takeover is 50% people are informed and know whether the takeover will actually occur. They also na ted orders. Nobody else is trading in the stock. a. Describe what will happen to the market price once these orders are submitted rakeover will occur in a few hours. What will your brother's profits be: positi or zero? hinformed Els in the medic er. the stock lours. Your brother broker to buy the Tis 50%, but a fer They also have sube submitted if in fact be: positive, nego