ALLGO Announced at Time T That It Was Acquiring DoLittle

question 22

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 -.2,+.1,-.5,-.1,+.1 for Time _{t - 2} to Time _{t + 2},respectively.The daily returns on the market were -.1,+.2,+.1,-.2,and +.2 for Time _{t - 2} to Time _{t + 2},respectively.What is the cumulative abnormal return for these five days?

• A)-.7
• B)-.8
• C)-.5
• D)-.10
• E)-.3

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Definitions:

Industry

The sector of an economy involved in the production of goods and services.

Inferiority

A feeling of lower standing in relation to others, which can affect an individual's self-esteem and social interactions.

Competence

Refers to having the necessary ability, knowledge, or skill to perform a task successfully.

Self-Worth

An individual's subjective valuation of themselves, encompassing self-esteem, self-respect, and a sense of personal value.