An Event Study Describes a Technique of Empirical Financial Research

question 32

Multiple Choice

An event study describes a technique of empirical financial research that

• A)enables an observer to assess the impact of a particular event on a firm's risk.
• B)enables an observer to assess the impact of a particular event on a firm's standard deviation.
• C)enables an observer to assess the impact of a particular event on a firm's stock price.
• D)enables an observer to assess the impact of a firm's return on risk of the market.

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Definitions:

Volume Variance

The difference between the expected volume of production or sales and the actual volume, affecting costs or revenues.

Variable Overhead Efficiency Variance

A calculation used to measure the efficiency with which a firm uses its variable overhead resources, based on the difference between actual and expected usage.

Unfavorable

A term describing outcomes that are worse than expected or budgeted, often used in financial and operational analysis.

Favorable

A term used in financial analysis to indicate that actual performance is better than expected or budgeted performance.