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In these multiple choice questions, circle all correct answers, if any. No justification is required. (1) An investor discovers that predictions about weather patterns published by the weather channel are amazingly accurate. In fact, these predictions enable the investor to predict the crop yields in a particular region and the stock prices of big farms in this region. This finding is an evidence of the A weak form efficiency B. strong form efficiency C. semi-strong efficiency D. none of the above (ii) A corporate lawmaker finds that he can "beat the market" by (1) investing in the stocks of some companies, then (2) passing laws that can boost the revenues of these companies. This finding is a violation of the: A. inefficiency B. weak form efficiency C. strong form officiency D. semi-strong efficiency (iii) A firm has been investing in an expensive research and development (R&D) project for a long time. The project is only known to a few high-level executives and the research scientists until recently a public announcement of a new product is made. The new product is profitable so the R&D project has a positive NPV. In a semi-strong efficient market, the price of the stock will: A. rise gradually between the start of the project and the announcement, rise instantaneously upon Announcement B. stay at the same price between the start of the project and the announcement, rise instantaneously upon the announcement C. stay at the same price upon the announcement, with no net effect D. drop instantaneously upon the announcement (iv) Technical analysis can offer advantages to investors if the financial markets are: A. inefficient B. weak for efficient C. strong form efficient D. semi-strong efficient (v) If the market is strongly efficient: A. semi-strong form efficiency must not hold B. semi-strong form efficiency must hold C. weak form efficiency may not hold D. weak form efficiency must hold

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