Cumulative abnormal returns (CAR)

Select one:

a. are used in event studies.

b. are better measures of security returns due to economic-wide events than are abnormal returns (AR).

c. are cumulated over the period prior to the firm-specific event.

d. are used in event studies and are better measures of security returns due to economic-wide events than are abnormal returns (AR).

e. are used in event studies and are cumulated over the period prior to the economic-specific event.

Fisher & Paykel has a beta of 2. NZX50 has a return of 2.5% yesterday, and the risk-free rate is currently 0%. You observe that Fisher & Paykel has a return of 5% yesterday. Assuming that markets are efficient, this suggests that

Select one:

a. bad news about Fisher & Paykel was announced.

b. good news about Fisher & Paykel was announced.

c. no news about Fisher & Paykel was announced.

d. none of the options are correct.