Problem 14-1 Cumulative Abnormal Returns
Delta, United, and American Airlines announced purchases of
planes on July 18...
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Finance
Problem 14-1 Cumulative Abnormal Returns
Delta, United, and American Airlines announced purchases ofplanes on July 18 (7/18), February 12 (2/12), and October 7 (10/7),respectively.
Delta
United
American
Date
Market Return
Company Return
Date
Market Return
Company Return
Date
Market Return
Company Return
7/12
?.42
?.63
2/8
?.91
?1.22
10/1
.62
.40
7/13
.00
.32
2/9
?1.01
?1.22
10/2
.52
.69
7/16
1.26
1.46
2/10
.52
.32
10/3
1.22
1.22
7/17
?1.26
?1.08
2/11
.72
3.34
10/6
.22
?2.58
7/18
?2.21
1.11
2/12
?.42
?.19
10/7
?2.32
?.45
7/19
?.85
?.70
2/15
1.22
2.78
10/8
.62
.62
7/20
?.91
?1.14
2/16
.62
.62
10/9
?.42
?.19
7/23
.73
.53
2/17
?.42
?.22
10/10
.42
?.25
7/24
.22
.01
2/18
.42
.30
10/13
.00
?.22
Given the above information, calculate the cumulative abnormalreturn (CAR) for these stocks as a group. (A negativeanswer should be indicated by a minus sign. Leave no cells blank -be certain to enter "0" wherever required. Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
Abnormal returns (Ri –RM)
Days from announcement
Delta
United
American
Sum
Average abnormal return
Cumulative abnormal return
?4
?3
?2
?1
0
1
2
3
4
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