AB Pharmaceutical Announced FDA Approval for a New Drug on October

question 51

Multiple Choice

A.B. Pharmaceutical announced FDA approval for a new drug on October 12. Uptown Drug Co. announced FDA approval for its new drug on October 14. No other information was released that would affect returns over this time period. What is the combined cumulative abnormal return for the 5 day period commencing 2 days prior to the FDA approval announcement date? Use the following data to answer this question. No trading occurred on October 15 or 16.

• A) 0.6 percent
• B) 1.0 percent
• C) 1.2 percent
• D) 1.3 percent
• E) 1.6 percent

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Definitions:

Psychological Inhibitions

Mental or emotional blocks that prevent an individual from expressing their thoughts, feelings, or desires freely.

Psychoanalytic Therapy

A therapeutic approach developed by Freud that aims to explore the unconscious mind's role in shaping behavior, often through dream interpretation and free association.

Transference

In psychoanalysis, the process by which patients project feelings about important people in their lives onto the therapist.

Unusually Close

Describes a relationship or bond that is more intimate or connected than is common or expected.