1. According to the behavioral finance, what is the implication of irrational markets?

a) Security prices are never overvalued or undervalued.

b) There exists gaps between securities intrinsic and market prices but are extremely hard to identify them on time.

c) There are no gaps between securities intrinsic and market prices and therefore markets are beatable.

d) There exists gaps between securities intrinsic and market prices and are easy for ordinary investors to identify them on time.

2. Based on the semi-strong form of the efficient market theory, an investor reacting immediately to a news flash on the television generally

a) will suffer a loss.

b) can make an abnormal profit.

c) is guaranteed to make a reasonable profit.

d) is too late to make an exceptional profit.