The abnormal return in an event study is described as the Multiple Choice Ototal

Question

The abnormal return in an event study is described as the Multiple Choice Ototal retum eamed on a securty for the 7 day period commenceng 3 day pnor to an announcement ffecingthat securty total return earned on a security for the 7- day period commencing 3 days prior to an announcement affecting that security actual return on a security minus the market rate of return on the same date total return earned by a security on the date of an announcement affecting that security any change in the market price of a security that exceeds 5 percent over a 7-day period change in market velue of a security on the day of an announcement affecting that security

Explanation / Answer

the abnormal rate in an event study is basically = return of stock on a day - normal/ average return on the same day

hence the correct choice is : actual return on a security minus the market return on the same date

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