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, Incorporated Jordan Company Company Return -0.3 -0.9 Date February 8 Market Return Company Return -0.3 -0.9 Date October 1 Market Return Company Return 1.7 0.5 July 13 1.5 0.3 February 9 -0.4 -0.9 October 2 1.6 0.5 July 16 0.1 0.6 February 10 0.6 0.6 October 3 0.9 1.3 July 17 -0.6 -0.2 February 11 0.8 2.4 October 6 -0.1 -0.4 July 18 -0.5 1.3 February 12 -0.1 0.1 October 7 -1.9 -0.4 July 19 -2.2 -0.4 February 15 1.6 1.6 October 8 1.6 0.5 July 20 -0.9 -1.0 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 July 24 0.1 -0.1 1.5 0.0 February 18 1.9 0.4 October 13 -0.3 -0.6 Abnormal returns (R; - RM) Days from announcement Average abnormal Cumulative Ross W'field Jordan Sum return average residual -4 -0.6 -0.6 0.7 -3 -1.2 -0.5 -0.4 -2 0.5 0.0 -2.1 -1 0.4 1.6 -6.1 0 1.8 0.2 -8.9 1 1.8 0.0 -6.4 2 -0.1 -0.5 -10.5 3 -0.2 0.1 -12.9 4 -0.6 -1.5
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, Incorporated Jordan Company Company Return -0.3 -0.9 Date February 8 Market Return Company Return -0.3 -0.9 Date October 1 Market Return Company Return 1.7 0.5 July 13 1.5 0.3 February 9 -0.4 -0.9 October 2 1.6 0.5 July 16 0.1 0.6 February 10 0.6 0.6 October 3 0.9 1.3 July 17 -0.6 -0.2 February 11 0.8 2.4 October 6 -0.1 -0.4 July 18 -0.5 1.3 February 12 -0.1 0.1 October 7 -1.9 -0.4 July 19 -2.2 -0.4 February 15 1.6 1.6 October 8 1.6 0.5 July 20 -0.9 -1.0 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 July 24 0.1 -0.1 1.5 0.0 February 18 1.9 0.4 October 13 -0.3 -0.6 Abnormal returns (R; - RM) Days from announcement Average abnormal Cumulative Ross W'field Jordan Sum return average residual -4 -0.6 -0.6 0.7 -3 -1.2 -0.5 -0.4 -2 0.5 0.0 -2.1 -1 0.4 1.6 -6.1 0 1.8 0.2 -8.9 1 1.8 0.0 -6.4 2 -0.1 -0.5 -10.5 3 -0.2 0.1 -12.9 4 -0.6 -1.5
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, Incorporated
Jordan Company
Company
Return
-0.3
-0.9
Date
February 8
Market
Return
Company
Return
-0.3
-0.9
Date
October 1
Market
Return
Company
Return
1.7
0.5
July 13
1.5
0.3
February 9
-0.4
-0.9
October 2
1.6
0.5
July 16
0.1
0.6
February 10
0.6
0.6
October 3
0.9
1.3
July 17
-0.6
-0.2
February 11
0.8
2.4
October 6
-0.1
-0.4
July 18
-0.5
1.3
February 12
-0.1
0.1
October 7
-1.9
-0.4
July 19
-2.2
-0.4
February 15
1.6
1.6
October 8
1.6
0.5
July 20
-0.9
-1.0
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
July 24
0.1
-0.1
1.5
0.0
February 18
1.9
0.4
October 13
-0.3
-0.6
Abnormal returns (R; - RM)
Days from
announcement
Average abnormal
Cumulative
Ross
W'field
Jordan
Sum
return
average residual
-4
-0.6
-0.6
0.7
-3
-1.2
-0.5
-0.4
-2
0.5
0.0
-2.1
-1
0.4
1.6
-6.1
0
1.8
0.2
-8.9
1
1.8
0.0
-6.4
2
-0.1
-0.5
-10.5
3
-0.2
0.1
-12.9
4
-0.6
-1.5
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