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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. Date July 12 July 13 July 16 July 17 July 18 July 19 July 20 July 23 July 24 Ross Company Market Return -0.3 0.3 0.4 -0.6 -1.7 -1.0 Days from announcement -4 -3 -2 -1 0 1 2 3 4 -0.9 0.6 0.3 Company Return -0.8 0.4 0.6 -0.2 1.3 Ross -0.4 -1.2 0.4 0.0 -0.5 01 0.2 0.4 3.0 0.6 -0.3 -0.2 -0.3 Westerfield, Incorporated Date February 8 February 9 February 10 February 11 February 12 February 15 February 16 February 17 February 18 Market Return -0.5 -0.2 0.2 0.6 0.2 0.5 -0.2 0.1 -0.3 -0.3 -0.6 0.4 0.6 -0.1 1.1 0.7 -0.1 0.7 Abnormal returns (R₁- RM) W'field Jordan 0.1 0.2 0.6 -0.6 1.5 0.4 -0.1 -0.2 -0.1 Company Return -0.8 -0.8 0.6 1.2 0.1 1.6 0.5 0.0 0.4 Sum -0.9 0.1 1.0 0.4 47 1.5 -0.6 -0.3 -0.7 Date October 1 October 20 October 3 October 6 October 7 October 8 October 9 October 10 October 13 Jordan Company Market Return 0.5 0.4 0.7 -0.1 -2.2 0.1 Average abnormal return -0.3 0.0 0.3 0.1 1.6 0.5 -0.2 -0.1 -0.2 -0.5 0.1 -0.5 Company Return 0.6 0.6 1.3 -0.7 -0.7 0.5 -0.6 -0.1 -0.6 Cumulative 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 "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place. Date July 12 July 13 July 16 July 17 July 18 July 19 July 20 July 23 July 24 Ross Company Market Return -0.3 0.3 0.4 -0.6 -1.7 -1.0 Days from announcement -4 -3 -2 -1 0 1 2 3 4 -0.9 0.6 0.3 Company Return -0.8 0.4 0.6 -0.2 1.3 Ross -0.4 -1.2 0.4 0.0 -0.5 01 0.2 0.4 3.0 0.6 -0.3 -0.2 -0.3 Westerfield, Incorporated Date February 8 February 9 February 10 February 11 February 12 February 15 February 16 February 17 February 18 Market Return -0.5 -0.2 0.2 0.6 0.2 0.5 -0.2 0.1 -0.3 -0.3 -0.6 0.4 0.6 -0.1 1.1 0.7 -0.1 0.7 Abnormal returns (R₁- RM) W'field Jordan 0.1 0.2 0.6 -0.6 1.5 0.4 -0.1 -0.2 -0.1 Company Return -0.8 -0.8 0.6 1.2 0.1 1.6 0.5 0.0 0.4 Sum -0.9 0.1 1.0 0.4 47 1.5 -0.6 -0.3 -0.7 Date October 1 October 20 October 3 October 6 October 7 October 8 October 9 October 10 October 13 Jordan Company Market Return 0.5 0.4 0.7 -0.1 -2.2 0.1 Average abnormal return -0.3 0.0 0.3 0.1 1.6 0.5 -0.2 -0.1 -0.2 -0.5 0.1 -0.5 Company Return 0.6 0.6 1.3 -0.7 -0.7 0.5 -0.6 -0.1 -0.6 Cumulative average residual

Essentials Of Investments
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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in Chapter 7 S 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. Date July 12 July 13 July 16 July 17 July 18 July 19 July 20 July 23 July 24 Ross Company Market Return -0.3 0.3 0.4 -0.6 -1.7 -1.0 Days from announcement -4 -3 -2 -1 0 1 2 3 4 -0.9 0.6 0.3 Company Return -0.8 0.4 0.6 -0.2 1.3 -0.4 -1.2 0.4 0.0 Ross -0.5 0.1 0.2 0.4 3.0 0.6 -0.3 -0.2 -0.3 Westerfield, Incorporated Date February 8 February 9 February 10 February 11 February 12 February 15 February 16 February 17 February 18 Market Return. -0.5 -0.21 0.2 0.6 0.2 0.5 -0.2 0.1 -0.3 -0.3 -0.6 0.4 0.6 -0.1 1.1 0.7 -0.1 0.7 Abnormal returns (R₁- RM) W'field Jordan 0.1 0.2 0.6 -0.6 15 0.4 -0.1 -0.2 -0.1 Company Return -0.8 -0.8 0.6 1.2 0.1 1.6 0.5 0.0 0.4 Sum -0.9 0.1 1.0 0.4 4.7 1.5 -0.6 -0.3 -0.7 Date October 1 October 2 October 3 October 6 October 7 October 8 October 9 October 10 October 13 Average abnormal return Jordan Company Market Return -0.3 00 0.3 0.1 1.6 0.5 -0.2 -0.1 -0.2 Saved 0.5 0.4 0.7 -0.1 -2.2 0.1 -0.5 0.1 -0.5 Company Return 0.6 0.6 1.3 -0.7 -0.7 0.5 -0.6 -0.1 -0.6 Cumulative average residual
Transcribed Image Text:in Chapter 7 S 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. Date July 12 July 13 July 16 July 17 July 18 July 19 July 20 July 23 July 24 Ross Company Market Return -0.3 0.3 0.4 -0.6 -1.7 -1.0 Days from announcement -4 -3 -2 -1 0 1 2 3 4 -0.9 0.6 0.3 Company Return -0.8 0.4 0.6 -0.2 1.3 -0.4 -1.2 0.4 0.0 Ross -0.5 0.1 0.2 0.4 3.0 0.6 -0.3 -0.2 -0.3 Westerfield, Incorporated Date February 8 February 9 February 10 February 11 February 12 February 15 February 16 February 17 February 18 Market Return. -0.5 -0.21 0.2 0.6 0.2 0.5 -0.2 0.1 -0.3 -0.3 -0.6 0.4 0.6 -0.1 1.1 0.7 -0.1 0.7 Abnormal returns (R₁- RM) W'field Jordan 0.1 0.2 0.6 -0.6 15 0.4 -0.1 -0.2 -0.1 Company Return -0.8 -0.8 0.6 1.2 0.1 1.6 0.5 0.0 0.4 Sum -0.9 0.1 1.0 0.4 4.7 1.5 -0.6 -0.3 -0.7 Date October 1 October 2 October 3 October 6 October 7 October 8 October 9 October 10 October 13 Average abnormal return Jordan Company Market Return -0.3 00 0.3 0.1 1.6 0.5 -0.2 -0.1 -0.2 Saved 0.5 0.4 0.7 -0.1 -2.2 0.1 -0.5 0.1 -0.5 Company Return 0.6 0.6 1.3 -0.7 -0.7 0.5 -0.6 -0.1 -0.6 Cumulative average residual
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