An index model regression applied to past monthly returns in Fords stock price produces the following estimates,
Question:
rF =.10% +1.1rM
If the market index subsequently rises by 8% and Ford’s stock price rises by 7%, what is the abnormal change in Ford’s stock price?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 88% (17 reviews)
Answer Abnormal Change in Fords Stock Price 190 Exp...View the full answer
Answered By
Syed Ali Haider
I have been teaching (accounting, auditing, and economics) to the students at the professional level for the past 3 years.
0.00
0 Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
An index model regression applied to past monthly excess returns in ABC Corporations stock price produces the following estimates, which are believed to be stable over time: RABC = .10% + 1.1RM If...
-
The data file Stock Market Index shows annual returns on a stock market index over 14 years. Test for randomness using the runs test.
-
The efficient market hypothesis implies that abnormal returns are expected to be zero. Yet in order for markets to be efficient, arbitrageurs must be able to force prices back into equilibrium. If...
-
verify that u= c ext cosx is a dimensional heat cqn. for. a soln. of suitable value of c. one
-
Consider the series 125.3 + 118.5 + 111.7 + 104.9 + a. Find S67. b. Write an expression for S67 using sigma notation.
-
What ethical issues do trucking companies create when they use electronic communications equipment to monitor their drivers on the road?
-
Do you feel nauseated much too often? True/False LO.1
-
In Problem 4.16, find: a. EVPI for the cost of making the processor. b. EVPI for the cost of subcontracting the processor. c. EVPI for both uncertain events.
-
Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division. Power costs are...
-
Auditor Changes at Daily Journal Corporation Charlie Munger is vice chairman of Berkshire Hathaway Inc. and is informally known as War- ren Buffett's "right arm." Munger also serves as chairman of...
-
Which of the following phenomena would be either consistent with or a violation of the efficient market hypothesis? Explain briefly. a. Nearly half of all professionally managed mutual funds are able...
-
The monthly rate of return on T-bills is 1%. The market went up this month by 1.5%. In addition, AmbChaser, Inc., which has an equity beta of 2, surprisingly just won a lawsuit that awards it $1...
-
A particle is described by the normalized wave function (x, y, z) = Axe-ax2 e -y2 e-yz2', where A, a, , and are all real, positive constants. The probability that the particle will be found in the...
-
Briefly, discuss the use of survey research in exploratory, descriptive, explanatory, and evaluation studies. Using a criminal justice example select one type of research study and develop one...
-
Medical Helicopters In a study of helicopter usage and patient survival, results were obtained from 47,637 patients transported by helicopter and 111,874 patients transported by ground (based on data...
-
Woodland Hills Company reported income before taxes (pretax financial income) in its income statement of $60,000. Among the items included in the computation of pretax financial income were the...
-
cest Shouldice Hospital in Canada is widely known for one thing-hernia repair! In fact, that is the only operation it performs, and it performs a great many of them. Over the past two decades this...
-
The activation energy for the gas phase decomposition of isobutyl bromide is 211 kJ. (CH3)2CHCH2 Br (CH3)2C=CH2+ HBr The rate constant at 676 K is 5.73 x 10-4 s. The rate constant will be 0.00647 s...
-
Why might you expect the accounting standards in Australia to be similar to those in the United Kingdom?
-
Dr. Chan obtained a $15,000 demand loan at prime plus 1.5% on September 13 from the Bank of Montreal to purchase a new dental X-ray machine. Fixed payments of $700 will be deducted from the dentists...
-
The following table gives the amount of time X, in seconds, by which an automated manufacturing process misses the designed completion time when performing a certain task. Negative values indicate...
-
The investment policy statement of an institution must be concerned with all of the following except: a. Its obligations to its clients. b. The level of the market. c. Legal regulations. d. Taxation.
-
A clearly written investment policy statement is critical for a. Mutual funds b. Individuals c. Pension funds d. All investors
-
a. Think about the financial circumstances of your closest relative in your parents generation (for example, your parents household if you are fortunate enough to have them around). Write down the...
-
Only need help on 4B and 5. Exercise 9-21 Breakeven Planning; Profit Planning (LO 9-2, 9-3] Connelly Inc., a manufacturer of quality electric ice cream makers, has experienced a steady growth in...
-
A project with an initial cost of $32,000 is expected to provide cash flows of $12,900, $13,100, $16,200, and $10,700 over the next four years, respectively. If the required return is 8.1 percent,...
-
A company that is expecting to receive EUR 500,000 in 60 days is considering entering into an FX futures contract to lock an exchange rate to USD for the transaction. The FX rate on the contract is...
Study smarter with the SolutionInn App