In an event study the objective is to
A) Determine whether it is possible to predict stock prices.
B) Determine how fast stock prices adjust to news.
C) Examine the cross-sectional distributions of returns.
D) Conduct a time series analysis of returns.
E) Determine normal P/E ratios.

Question

Quizplus · Accepted Answer

The objective of an event study is to examine how fast stock prices adjust to news or events. It is not about predicting stock prices, examining cross-sectional distributions of returns, conducting time-series analysis of returns, or determining normal P/E ratios.

In an Event Study the Objective Is to