Examine the accompanying figure, which presents cumulative abnormal returns both before an...

Examine the accompanying figure, which presents cumulative abnormal returns both before and after dates on which insiders buy or sell shares in their firms. How do you interpret this figure? What are we to make of the pattern of CARs before and after the event date?

Source: Reprinted from Nejat H. Seyhun, "Insiders, Profits, Costs of Trading and Market Efficiency,"Journal of Financial Economics 16 (1986), Copyright 1986 with permission from Elsevier Science.