Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Delta, United, and American Airlines announced purchases of planes on July 1 8 ( 7 / 1 8 ) , February 1 2 ( 2

Delta, United, and American Airlines announced purchases of planes on July 18(7/18), February 12(2/12), and October 7(10/7), respectively.
\table[[Delta,United,American],[,Market,Company,,Market,Company,,Market,Company],[Date,Return,Return,Date,Return,Return,Date,Return,Return],[7/12,-.50,-.79,28,-.99,-1.38,10/1,.70,.32],[7/13,.00,.40,29,-1.09,-1.38,102,.60,.85],[7/16,2.48,2.78,210,.60,.30,103,1.30,1.30],[7/17,-2.48,-2.14,211,.80,4.93,10/6,.30,-4.17],[7/18,-2.29,1.19,212,-.50,-.11,10/7,-2.40,-.30],[7/19,-.93,-.62,215,1.30,4.10,10/8,.70,.70],[720,-.99,-1.15,216,.70,.70,109,-.50,-.34],[723,.81,.45,217,-.50,-.26,1010,.50,-.30],[724,.30,.01,2/18,.50,.22,10/13,.00,-.30]]
Given the above information, calculate the cumulative abnormal return (CAR) for these stocks as a group. All of the stocks have a beta of 1 and no other announcements are made. (A negative answer should be indicated by a minus sign. Leave no cells blank be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16.)
\table[[\table[[Days from],[announcement]],Abnormal returns (Ri-RM),\table[[Average abnormal],[return]],\table[[Cumulative],[abnormal return]]],[Delta,United,American,Sum],[-4],[-3],[-2],[-1],[0],[1],[2],[3],[4,,,,,,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

5. Identify and describe nine social and cultural identities.

Answered: 1 week ago

Question

2. Define identity.

Answered: 1 week ago

Question

4. Describe phases of majority identity development.

Answered: 1 week ago