The efficient market hypothesis predicts that most


1. The efficient market hypothesis predicts that most fundamental analysis is doomed to failure. Explain why.

2. How are risk-adjusted (or abnormal, or excess) returns at time t calculated?

3. Consider the portfolio replicating method and the risk-neutral valuation method. Which of these two methods is more efficient to price multiple derivative assets on the same underlying asset?

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Financial Management: The efficient market hypothesis predicts that most
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