Column (A) in Table 13.1 shows the monthly return on the British FTSE 100 index from June

Question:

Column (A) in Table 13.1 shows the monthly return on the British FTSE 100 index from June 2013 through January 2015. Columns (B) and (C) show returns on the stocks of two firms-Executive Cheese and Paddington Beer. Both firms announced their earnings in January 2015. Calculate the average abnormal return of the two stocks during the month of the earnings announcement.

TABLE 13.1

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...