Question

Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)

Ross Co.				Westerfield, Inc.				Jordan Company
Date	Market Return	Company Return		Date	Market Return	Company Return		Date	Market Return	Company Return
7/12	-0.6	-0.3		2/8	-0.6	-0.3		10/1	1.4	0.6
7/13	1.2	0.3		2/9	-0.7	-0.3		10/2	1.3	0.6
7/16	0.4	0.3		2/10	0.4	0.6		10/3	0.7	1.3
7/17	-0.6	-0.2		2/11	0.6	2.1		10/6	-0.1	-0.7
7/18	-0.8	1.3		2/12	-0.1	0.1		10/7	-2.2	-0.7
7/19	-1.9	-0.1		2/15	1.2	1.9		10/8	1.2	0.6
7/20	-0.9	-0.3		2/16	0.7	0.5		10/9	-0.5	-0.6
7/23	0.6	0.4		2/17	-0.1	0		10/10	0.1	-0.1
7/24	1.2	0		2/18	1.6	0.4		10/13	-0.1	-0.6

	Abnormal returns (Ri – R­M) Days from announcement Ross W’field Jordan Sum Average abnormal return Cumulative average residual −4 −3 −2 −1 0 1 2 3 4

Answer 1

Answer:

The above excel with 'show formula' along with base data are as below: