(a) What is an event study? Present and explain one potential use of an event study.

(b) Explain the difference between the cumulative abnormal return and buy-and-hold abnormal return methods of constructing a test statistic. What are the advantages and disadvantages of each approach?

(c) Why might we use a non-parametric test in event studies and what would be the advantages and disadvantages of doing so compared with a parametric test?