Cumulative abnormal returns (CAR)
A) are used in event studies.
B) are better measures of security returns due to firm-specific events than are abnormal returns (AR).
C) are cumulated over the period prior to the firm-specific event.
D) a and b.
E) a and c.

Question

Quizplus · Accepted Answer

Cumulative abnormal returns (CAR) are used in event studies to assess the impact of firm-specific events over a period, making them better measures than single-period abnormal returns (AR).

Cumulative Abnormal Returns (CAR)