6 Event Study and Assignment Preparation Flashcards
1
Q
What is an event study?
A
A statistical method to measure the impact of an event on stock price
2
Q
What is one common concern in event studies? And what is a solution to it?
A
When multiple announcements by the same enterprise occur. Show results with and without the occurring event
3
Q
What is the time span for event window and estimation window?
A
Event window is t=0, …, 7
Estimation window is t=-200, …, -15
4
Q
How do you calculate return?
A
Stock price - Stock price from the day before / Stock price from the day before
5
Q
How do you calculate the expected return for the mean adjusted model?
A
Take the average of the stock return only for the estimation window
