Question: 4. Suppose we run the following regression: Return (t) Prob = 0.2 +1.2 Return (t-1) + e(t) (0.002) (0.0021) t = Months Return at t-1

4. Suppose we run the following regression: Return (t) Prob =

4. Suppose we run the following regression: Return (t) Prob = 0.2 +1.2 Return (t-1) + e(t) (0.002) (0.0021) t = Months Return at t-1 (previous) predicts return at t. In this situation, is the market efficient? Explain. 4. Suppose we run the following regression: Return (t) Prob = 0.2 +1.2 Return (t-1) + e(t) (0.002) (0.0021) t = Months Return at t-1 (previous) predicts return at t. In this situation, is the market efficient? Explain

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