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Few days ago, NEW - WAVE Corp, a public company announced the hiring of a new CEO via a press release. Table below reports the
Few days ago, NEWWAVE Corp, a public company announced the hiring of a new CEO via a press release. Table below reports the return on the stock and the market days before, during, and after the announcement. The equity beta of NEWWAVE is Returns on NEWWAVE and returns on the market SPTSX composite market index during the day window period event were as follows: Day NEWWAVE Return Market Return Abnormal Return Cumulative Abnormal Return Announcement Day Assume no news other news occurred before and after announcement day. a Determine NEWWAVE abnormal returns and cumulative abnormal returns during the day window period. Show procedure and values in the table above points b Interpret the meaning of the market reaction during the announcement day that is what do investors infer about the death of the company cofounder? points c From the results in the day window period, is the event consistent with market efficiency weak form, semistrong form, or strong form Explain. points d Based on results in the table above, was there possibility of a potential investment strategy? points
Few days ago, NEWWAVE Corp, a public company announced the hiring of a new CEO via a press
release. Table below reports the return on the stock and the market days before, during, and after the
announcement. The equity beta of NEWWAVE is Returns on NEWWAVE and returns on the
market SPTSX composite market index during the day window period event were as follows:
Day NEWWAVE
Return
Market
Return
Abnormal Return Cumulative
Abnormal Return
Announcement
Day
Assume no news other news occurred before and after announcement day.
a Determine NEWWAVE abnormal returns and cumulative abnormal returns during the day
window period. Show procedure and values in the table above points
b Interpret the meaning of the market reaction during the announcement day that is what do
investors infer about the death of the company cofounder? points
c From the results in the day window period, is the event consistent with market efficiency
weak form, semistrong form, or strong form Explain. points
d Based on results in the table above, was there possibility of a potential investment strategy?
points
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