Assignment2 - Assignment 2 Corporate Finance II (ACTSC372)...

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Assignment 2 Corporate Finance II (ACTSC372) Due date: Feb 25, 5:00pm. Outside MC 6016 1. Some investors claim to observe patterns in stock market prices. Are such patterns consistent with the efficient market hypothesis? If so, what form of market efficiency is violated? 2. The efficient market hypothesis implies that all mutual funds should obtain the same expected risk-adjusted returns. Therefore, we can simply pick mutual funds at random. Is this statement true or false? Explain. 3. On January 23, 1998, Royal Bank of Canada and Bank of Montreal announced their plans for a merger. On April 17 of the same year, CIBC and TD Bank announced plans for a second merger. Both proposed mergers were later rejected by the finance minister and did not occur. Using the S&P database or an alternative source, download daily data for returns on each of these four banks and for the TSX 60 Index for January and April 1998. Assuming that the bank’s betas were appropriately equal to 1, find the cumulative excess returns associated
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This note was uploaded on 01/17/2011 for the course ACTSC 372 taught by Professor Maryhardy during the Spring '09 term at Waterloo.

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Assignment2 - Assignment 2 Corporate Finance II (ACTSC372)...

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