1. An investor reads a research report on a company's financial statements and invests based upon this report. What form of market efficiency must be in effect for the investor to earn excess profits from this investment?
A. Arbitrage-form
B. Strong-form
C. Neutral-form
D. Weak-form
2.Which of the following is the subject of event study?
A. The analysis of company earnings reports
B. How stock prices react when two firms merge
C. The analysis P/E ratios
D. The ratio of stock price movement to the movement of the market as a whole