Ross Company, Westerfield, Incorporated; and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. Note: A negative value should be indicated by a minus sign. Leave no cells blank- be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place. Ross Company Market Westerfield, Incorporated Jordan Company Date Return Company Return July 12 -0.2 -0.4 Date February 8 Market Return Company Return -0.7 -0.9 Date October 1 Market Return Company Return 0.3 0.5 July 13 0.1 0.3 February -0.8 -0.9 October 2 0.2 0.0 July 16 0.6 0.8 February 101 0.6 0.4 October 3 0.9 1.J July 17 -0.4 -0.2 February 11 0.8 1.0 October 6 -0.1 -0.5 July 18 1.9 1.3 February 12 -0.1 0.1 October 7 -2.4 -0.5 July 19 -0.0 -0.6 February 15 1.3 1.4 October 0.3 10.3 July 201 -0.9 -1.0 February 16 0.7 0.7 October 9 -0.5 -0.4 July 23 0.6 0.4 February 17 -0.1 0.0 October 10 0.1 -0.1 July 24 0.1 0.0 February 18 0.5 0.4 October 13 -0.2 Days from announcement -4 -3 -2 -1 1 2 3 4 Abnormal Returns (R-Rul Ross Wfield Jordan Sum Average abnormal Cumulative average return residual
Ross Company, Westerfield, Incorporated; and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. Note: A negative value should be indicated by a minus sign. Leave no cells blank- be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place. Ross Company Market Westerfield, Incorporated Jordan Company Date Return Company Return July 12 -0.2 -0.4 Date February 8 Market Return Company Return -0.7 -0.9 Date October 1 Market Return Company Return 0.3 0.5 July 13 0.1 0.3 February -0.8 -0.9 October 2 0.2 0.0 July 16 0.6 0.8 February 101 0.6 0.4 October 3 0.9 1.J July 17 -0.4 -0.2 February 11 0.8 1.0 October 6 -0.1 -0.5 July 18 1.9 1.3 February 12 -0.1 0.1 October 7 -2.4 -0.5 July 19 -0.0 -0.6 February 15 1.3 1.4 October 0.3 10.3 July 201 -0.9 -1.0 February 16 0.7 0.7 October 9 -0.5 -0.4 July 23 0.6 0.4 February 17 -0.1 0.0 October 10 0.1 -0.1 July 24 0.1 0.0 February 18 0.5 0.4 October 13 -0.2 Days from announcement -4 -3 -2 -1 1 2 3 4 Abnormal Returns (R-Rul Ross Wfield Jordan Sum Average abnormal Cumulative average return residual
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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Transcribed Image Text:Ross Company, Westerfield, Incorporated; and Jordan Company announced a new agreement to market their respective products in
China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return
(CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return.
Note: A negative value should be indicated by a minus sign. Leave no cells blank- be certain to enter "0" wherever required. Do
not round intermediate calculations. Round your answers to 1 decimal place.
Ross Company
Market
Westerfield, Incorporated
Jordan Company
Date
Return
Company
Return
July 12
-0.2
-0.4
Date
February 8
Market
Return
Company
Return
-0.7
-0.9
Date
October 1
Market
Return
Company
Return
0.3
0.5
July 13
0.1
0.3
February
-0.8
-0.9
October 2
0.2
0.0
July 16
0.6
0.8
February 101
0.6
0.4
October 3
0.9
1.J
July 17
-0.4
-0.2
February 11
0.8
1.0
October 6
-0.1
-0.5
July 18
1.9
1.3
February 12
-0.1
0.1
October 7
-2.4
-0.5
July 19
-0.0
-0.6
February 15
1.3
1.4
October
0.3
10.3
July 201
-0.9
-1.0
February 16
0.7
0.7
October 9
-0.5
-0.4
July 23
0.6
0.4
February 17
-0.1
0.0
October 10
0.1
-0.1
July 24
0.1
0.0 February 18
0.5
0.4
October 13
-0.2
Days from
announcement
-4
-3
-2
-1
1
2
3
4
Abnormal Returns (R-Rul
Ross
Wfield
Jordan
Sum
Average
abnormal
Cumulative
average
return
residual
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