We discussed event study methodology in the class in great details. Explain precisely the statistical assumptions that needs to be satisfied for an event study method to be valid. Give one example when event study method CAN be an useful tool for decision analysis. Give one example where event study method CANNOT be an useful tools for analysis in Finance. Explain precisely the link between EVENT STUDY method and the Efficient Market Hypothesis (EMH). Suggested Answer: Events must be I.I.D. Events cannot cluster over time or across firms and industries. For instance, cannot use Event Study to analyse the effect of an aggregate macroecor