The stock price of Company X doubled over the past year, the stock price of Company Z decreased by over 50%. If the market is efficient, if the stocks have the same Beta, and if you do a little research:
A. Will you be able to identify which stock is most likely to have the higher return next year? Why or why not?
B. Will you be able to identify the economic factors that contributed to last year's stock returns? (i c., Why did Company X double, and why did Company Z decrease by 50%?) Why or why not?