Days from nouncement Air Canada WestJet Transat A.T. Inc. Group return Average abnormal return Cumulative abnormal return -4 -3 -2 -1 0 FUTMNTO123
Days from nouncement Air Canada WestJet Transat A.T. Inc. Group return Average abnormal return Cumulative abnormal return -4 -3 -2 -1 0 FUTMNTO123
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
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Transcribed Image Text:Air Canada, WestJet, and Transat A.T. Inc. announced purchases of planes on July 18 (18/7), February 12 (12/2), and October 7 (7/10),
respectively. Given the following information, calculate the CAR for these stocks as a group. Graph the result and provide an
explanation. All of the stocks have a beta of 1, and no other announcements are made. (Round the answers (including those for
intermediate calculations) to 1 decimal place. Negative values should be indicated by a minus sign. Leave no cell blank - Be sure
to enter "O" wherever required.)
Air Canada
Market Company
WestJet
Market Company
Transat A.T. Inc.
Market Company
Date
return
return Date return
return
Date
return return
12/7
-0.3
-0.5
8/2
-0.4
-0.6
1/10
0.6
0.4
13/7
0.0
0.2
9/2
-0.5
-0.6
2/10
1.5
1.7
16/7
1.5
1.7
10/2
0.9
0.7
3/10
1.1
1.1
17/7
-0.5
-0.3
11/2
1.1
1.3
6/10
0.3
-0.1
18/7 -2.1
0.6
12/2
-0.5
-0.3
7/10
-1.8
-0.3
19/7
-0.7
-0.5
15/2
1.6
1.7
8/10
0.5
0.5
20/7
-0.9
-1.0
16/2
1.0
1.0
9/10
-0.7
-0.6
23/7
0.3
0.1
17/2
-0.7
-0.6
10/10
0.7
0.1
24/7
0.3
0.1
18/2
0.8
0.7
13/10
0.0
-0.1
Abnormal returns (Ri - RM)
Days from
announcement Air Canada
WestJet
-4
-2
-1
0
1
INTOL234
-3
Transat A.T.
Inc.
Average
abnormal
Group return return
Cumulative
abnormal
return
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