23. Examine the accompanying figure,57 which presents cumulative abnormal returns both before and after dates on which insiders buy or sell shares in their firms. How do you interpret this figure? What are we to make of the pattern of CARs before and after the event date?

Transcribed Image Text:

4 Cumulative Daily Average Prediction Errors (%) 1 L 3 -2 -200 -100 0 100 Event Day Relative to Insider Trading Day Sales Purchases 200 300