Instructions For the next 2 questions, use the following information: Caribou Coffee Assume the CAPM(EC) + [20.) - D is the correct model of expected returns. You estimate Caribou Coffee's beta to be 0.5 (folks just can't go without their coffee, even if the market is tanking!). 13 1 point Say you observe the market return of 1% five days before Caribou announces earnings and the return of Caribou on the same day is 2.43%. If the risk free rate Is 0.25% per day, what is the abnormal return for Caribou on this day? O 1.6% O 17% O 1.8% 1.9% Next Previous 14 Do 1 point Continuing with the last question, if the abnormal returns for the following 10 days (starting the day AFTER-5, including announcement day) are as given in the following table, what is the cumulative abnormal return at the end of 5 days after announcement? Use the day 4 days prior to announcement as your baseline ie CAR starting at the beginning of that day is zero. Day -4 -3 1-2 -1 0 1 1 2 3 4 5 Abnormal 1.1% 0.7% 0% 0.9% 4%0.8% 1% 1% 0.1% 0.1% Return O 8.5% 0 9.1% le 9.4% 9.7%