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Question - The return on ABC Ltd.'s shares on a day was 0.7 per cent. The expected return on ABC Ltd.'s share was 0.1 per cent on that day. The return on ABC Ltd.'s shares on the next day was 0.6 per cent. The expected return on ABC Ltd.'s share was 0.1 per cent on that next day.
The return on BCD Ltd.'s shares on a day was 0.4 per cent. The expected return on BCD Ltd.'s share was -0.1 per cent on that day. The return on BCD Ltd.'s shares on the next day was 0.4 per cent. The expected return on BCD Ltd.'s share was -0.2 per cent on that next day.
The return on CDE Ltd.'s shares on a day was 0.1 per cent. The expected return on CDE Ltd.'s share was -0.4 per cent on that day. The return on CDE Ltd.'s shares on the next day was 0.5 per cent. The expected return on CDE Ltd.'s share was -0.5 per cent on that next day.
Required - Calculate the cumulative average abnormal return for these three companies over these two days.
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