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 "O" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place. Date July 12 Ross Company Market Return Westerfield, Incorporate Company Market Company Jordan Company Market Company Return -0.6 -0.5 Date February 8 Return Return -0.6 -0.5 Date October 1 Return Return 0.8 0.9 July 13 0.6 0.3 February 9 -0.3 -0.5 October 2 0.7 0.9 July 16 0.1 0.3 February 10 0.1 0.6 October 3 0.4 1.3 July 17 -0.6 -0.2 February 11 0.3 1.5 October 6 -0.1 -0.4 July 18 -1.4 1.3 February 12 -0.1 0.1 October 7 -1.9 -0.4 July 19 -1.3 -0.1 February 15 0.8 1.9 October 8 0.2 0.4 July 20 -0.9 -1.5 February 16 0.7 0.2 October 9 -0.5 -0.9 July 23 0.6 0.4 February 17 -0.1 0.0 October 10 0.1 -0.1 July 24 0.6 0.0 February 18 1.0 0.4 October 13 -0.2 -0.6 Days from announcement -4 -3 -2 -1 0 1 2 3 4 Abnormal returns (R-RM) Ross W'field Average abnormal Cumulative Jordan Sum return average 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 "O" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place. Date July 12 Ross Company Market Return Westerfield, Incorporate Company Market Company Jordan Company Market Company Return -0.6 -0.5 Date February 8 Return Return -0.6 -0.5 Date October 1 Return Return 0.8 0.9 July 13 0.6 0.3 February 9 -0.3 -0.5 October 2 0.7 0.9 July 16 0.1 0.3 February 10 0.1 0.6 October 3 0.4 1.3 July 17 -0.6 -0.2 February 11 0.3 1.5 October 6 -0.1 -0.4 July 18 -1.4 1.3 February 12 -0.1 0.1 October 7 -1.9 -0.4 July 19 -1.3 -0.1 February 15 0.8 1.9 October 8 0.2 0.4 July 20 -0.9 -1.5 February 16 0.7 0.2 October 9 -0.5 -0.9 July 23 0.6 0.4 February 17 -0.1 0.0 October 10 0.1 -0.1 July 24 0.6 0.0 February 18 1.0 0.4 October 13 -0.2 -0.6 Days from announcement -4 -3 -2 -1 0 1 2 3 4 Abnormal returns (R-RM) Ross W'field Average abnormal Cumulative Jordan Sum return average 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 "O" wherever required. Do
not round intermediate calculations. Round your answers to 1 decimal place.
Date
July 12
Ross Company
Market
Return
Westerfield, Incorporate
Company
Market
Company
Jordan Company
Market
Company
Return
-0.6
-0.5
Date
February 8
Return
Return
-0.6
-0.5
Date
October 1
Return
Return
0.8
0.9
July 13
0.6
0.3
February 9
-0.3
-0.5
October 2
0.7
0.9
July 16
0.1
0.3
February 10
0.1
0.6
October 3
0.4
1.3
July 17
-0.6
-0.2
February 11
0.3
1.5
October 6
-0.1
-0.4
July 18
-1.4
1.3
February 12
-0.1
0.1
October 7
-1.9
-0.4
July 19
-1.3
-0.1
February 15
0.8
1.9
October 8
0.2
0.4
July 20
-0.9
-1.5
February 16
0.7
0.2
October 9
-0.5
-0.9
July 23
0.6
0.4
February 17
-0.1
0.0
October 10
0.1
-0.1
July 24
0.6
0.0
February 18
1.0
0.4
October 13
-0.2
-0.6
Days from
announcement
-4
-3
-2
-1
0
1
2
3
4
Abnormal returns (R-RM)
Ross
W'field
Average abnormal
Cumulative
Jordan
Sum
return
average residual
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