You have analyzed the results of $125$ fund managers and have learned that $15$ of them have outperformed the market every year for the last $5$ years.

$-$What can you conclude? Are these $15$ fund managers more talented or lucky?

Which of the following hypothetical phenomena would be either consistent or a violation of the efficient market hypothesis? Explain briefly.

a$)$ Nearly half of all professionally managed mutual funds are able to outperform the S&P $500$ in a typical year.

b$)$ Money managers who outperform the market $($on a risk$-$adjusted basis$)$ in one$-$year are likely to outperform the market in the following year.

c$)$ Stock prices tend to be predictably more volatile in January than in other month.

d$)$ Stock prices of companies that announce increased earnings in January tend to outperform the market in February.

e$)$ Stocks that perform well in one week and perform poorly in the following week.

According to efficient market anomalies

Which day of the week tends to be lower?

Which month of the year tends to be higher?

Would you rather invest in the top winners or top losers over the last year?

Would you rather invest in growth firms or value firms? How is this determined?

Would you rather invest in small firms or large firms?

Use the following information for to answer questions $4$ and $5.$

The price of IBM today is $$165\mathrm{.}75.$ Your broker gives you an initial margin of $70\%,$ a maintenance margin of $30\%$ and will charge $8\%$ interest on margin loans. IBM will pay no dividends.

$4.$ If you short $800$ shares, what price will you receive a margin call?

$5.$ If you purchase $1,500$ shares on margin, what price will you receive a margin call $($don$\text{'}$t forget to account for the interest? Answer all $5$ questions thank you