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 abnormal returns (AR) which are typically assessed at a single point in time.

Cumulative Abnormal Returns (CAR)