Exhibit 61
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 19

Multiple Choice

Exhibit 6.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c c c c } \text { Stock } & \mathbf { R } _ { \text {it } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\\hline \mathrm { C } & 12 & 10 & 0 & 0.8 \\\mathrm { E } & 10 & 8.0 & 0 & 1.1\end{array}$$ R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 6.1. What is the abnormal rate of return for Stock E during period t using only the aggregate market return (ignore differential systematic risk) ?

• A)4.0%
• B)2.0%
• C)1.2%
• D)-1.05%
• E)-8.5%

Understand the strategic motives and financial implications of mergers and acquisitions.

Distinguish between different types of mergers, acquisition strategies, and their financial impact.

Analyze how shareholder rights plans (poison pills) and other defense mechanisms can affect takeover attempts.

Understand the principles behind purchase accounting and the treatment of goodwill in mergers and acquisitions.

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Definitions:

Scienter

Knowledge of wrongdoing or fraudulent intent, often a necessary element to prove in securities fraud cases.

Negligent

Failing to exercise the care that a reasonably prudent person would exercise in similar circumstances, often leading to harm or injury.

Working Papers

Documents that record the audit processes, evidence, and findings, used by auditors to support their analysis and conclusions.

Financial Reports

Documents that provide an overview of a company's financial condition, including income statements, balance sheets, and cash flow statements.