Please answer the following short essay question, each can be answered in a succinct paragraph.
- What are the five anomalies (from the efficient markets chapter, semi-strong section)? Which three of the
five help to explain the best performing style-capitalization equity returns over longer periods of time? - Explain how asset bubbles may (or may not) support the efficient market hypothesis.
- Explain how the positive earnings announcement price drift (or Surprise Unexpected Earning (SUE)) works.
How would you use SUE in this Fall 2020 earning reporting season if you were a hedge fund manager? - Explain how you would use the Security Market Line (SML) to discern the breadth of a portfolio’s individual
stock winners vs. losers. - Explain how the link between price (P) and intrinsic value (V) are viewed by proponents of the Efficient
Market Hypothesis and by those who are not proponents. - What are the two questions that a fixed income portfolio manager needs to address when managing an
active portfolio?