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You analyzed the returns of a sample of stocks. You found that, on average, the firms...

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Finance

You analyzed the returns of a sample of stocks. You found that,on average, the firms with high E/P ratios have higher subsequentreturns.

(i) Discuss an explanation for this pattern that is consistentwith the EMH.

(ii) Discuss an explanation that is not consistent with theEMH.

(A couple sentences per part.)

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