1. Which of the following is a characterization of the Efficient Markets Hypothesis?

(a) Markets efficiently incorporate all public information, which consequently renders beating the market impossible.
(b) The stock market in the U.S. outperforms every other stock market in the world.
(c) Stocks earn a higher return than bonds, because they are riskier investments.
(d) The Efficient Markets Corporation should be included in the S&P500 index.

2. What is the Head and Shoulders pattern? Does it prove to be a powerful, short-run opportunity?

3. What is the random walk of the stock market?

4. How was the company Palm created in March, 2000?

5. What happened to its parent company 3Com? What is the new share structure of 3COM.

6. What happened to the stock prices of Palm and 3Com? What is the implication of negative price in this event?

7. Is this an example of market efficiency? Please explain.

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