What is meant by a "random walk?" Explain why prices in an efficient market should follow something like a random walk. (pages 333-336 of the book)
Describe the three forms of the efficient-market hypothesis and give an example of the evidence for each. (pages 337-341 of the book)
Give three examples of apparent exceptions to the efficient-market hypothesis. (pages 342-343 of the book)
Suppose after considerable research you identify a group of stocks that have had above-average returns in the past. What are the possible explanations? (page 342 of the book)
What is "prospect theory?" How does it differ from the assumptions used to develop the capital asset pricing model? (page 344 of the book)
Describe two ways that individuals may make biased assessments of probabilities. Give an example of each. (page 345 of the book)
This chapter described six lessons of market efficiency. What are they? Give an example of each. (pages 349-354 of the book)
