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A Car Maker Announced a Recall for Faulty Brakes

question 45

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A car maker announced a recall for faulty brakes. The company stock returned. 004 the day before the announcement; -.001 the day of the announcement and .0045 the day after the announcement. The market average was .006, .0072 and .004 for the three days respectively. The daily beta for the car maker is .9. What are the three abnormal returns for the car maker's stock?


Definitions:

Labour Cost

The total expense incurred from compensating employees for their work, including wages, benefits, and taxes.

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Systems or programs designed to reward employees monetarily for their work or performance.

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A detailed motion analysis technique, using high-frame-rate camera recordings to study the individual components of a worker's movement to optimize efficiency and ergonomics.

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The examination of how tasks are completed in order to identify efficiencies, reduce waste, and improve productivity.

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