ALLGO Announced at Time T That It Was Acquiring DoLittle

question 5

Multiple Choice

ALLGO announced at Time t that it was acquiring DoLittle Industries.There were no other announcements affecting these firms.ALLGO's stock had daily returns of +0.1,+0,−0.5,−0.2,+0.1 for Time_{t − 2} to Time_{t + 2},respectively.The daily returns on the market were −0.1,+0.2,+0.3,−0.2,and +0.2 for Time_{t − 2} to Time_{t + 2},respectively.What is the cumulative abnormal return for these 5 days?

• A) −0.7
• B) −0.9
• C) −0.5
• D) −0.8
• E) −0.3

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