Question: (a) Discuss, using examples, the problems raised by frequency of the financial data on financial returns as fare as normality is concerned. (b) Discuss the

(a) Discuss, using examples, the problems raised by frequency of the financial data on financial returns as fare as normality is concerned.

(b) Discuss the test for normality considering the definition of skewness and kurtosis as well as empirical evidence on stock market returns.

(c) Prove and explain that if log-prices follow a random walk with no drift they are a martingale, while if they have a drift they are not a martingale.

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