In Tests of Market Efficiency, CAR Refers To

question 13

Multiple Choice

In tests of market efficiency, CAR refers to:

• A) cumulative average return.
• B) compound average return.
• C) compound annual return.
• D) cumulative abnormal return.

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Definitions:

Test Statistic

is a calculated value from sample data used to determine whether to reject the null hypothesis in hypothesis testing.

Power Consumption

The amount of energy used by a device or system over a certain period.

Standard Deviation

An indicator of the extent of variability or spread among a collection of numbers, showing the degree to which these numbers differ from their average.

Significance Level

Significance level, often denoted by alpha, is the probability of rejecting the null hypothesis when it is true, serving as a threshold for determining statistical significance.