CORPORATE FINANCE - CONNECT ACCESS
CORPORATE FINANCE - CONNECT ACCESS
12th Edition
ISBN: 9781264054893
Author: Ross
Publisher: MCG
Question
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Chapter 14, Problem 1QAP
Summary Introduction

Adequate information:

    Stock DStock UStock A
    Date Market returnCompany return Date Market returnCompany return Date Market returnCompany return
    12-Jul-0.3-0.58-Feb-0.9-1.11-Oct0.50.3
    13-Jul00.29-Feb-1-1.12-Oct0.40.6
    16-Jul0.50.710-Feb0.40.23-Oct1.11.1
    17-Jul-0.5-0.311-Feb0.60.86-Oct0.1-0.3
    18-Jul-2.21.112-Feb-0.3-0.17-Oct-2.2-0.3
    19-Jul-0.9-0.715-Feb1.11.28-Oct0.50.5
    20-Jul-1-1.116-Feb0.50.59-Oct-0.3-0.2
    23-Jul0.70.517-Feb-0.3-0.210-Oct0.31.1
    24-Jul0.20.118-Feb0.30.213-Oct0-0.1

To compute: The cumulative abnormal return for these stocks as a group, prepare the graph and provide explanation.

Introduction: The summation of abnormal returns for a required period of time is termed as cumulative abnormal return.

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