Are these two statements correct? Statement 1: Alpha is the difference between a real return and a benchmark return. If the benchmark is too low (high), the alpha will be too high (low). This is the joint hypothesis problem. Any test of market efficiency is also jointly a test of the underlying assumed equilibrium model. Statement 2: Long-run abnormal returns are more difficult to establish than short-run abnormal returns. A. Both statements are correct. B. Both statements are incorrect. C. Only Statement 1 is correct. D. Only Statement 2 is correct.

4. Are these two statements correct? Statement 1: Because empirical researchers established that excess returns were proportional to betas, Fama and French were motivated to develop the Fama-French Three Factor Model. Statement 2: Two of the net stock anomalies concern SEOs and share repurchases. The anomaly is that firms issuing shares and firms repurchasing shares experience abnormal negative returns (relative to their peers or relative to benchmarks) for 3-5 years following the event. A. Both statements are correct. B. Both statements are incorrect. C. Only Statement 1 is correct. D. Only Statement 2 is correct.