Cumulative Abnormal Returns Delta, United, and American Airlines announced purchases of planes on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the following information, calculate the cumulative abnormal return (CAR) for these stocks as a group. Graph the result and provide an explanation. All of the stocks have a beta of 1, and no other announcements are made.
Delta | United | American | ||||||
Date | Market Return | Company Return | Date | Market Return | Company Return | Date | Market Return | Company Return |
7/12 | ‒.3 | ‒.5 | 2/8 | ‒.9 | ‒1.1 | 10/1 | .5 | .3 |
7/13 | .0 | .2 | 2/9 | ‒1.0 | ‒1.1 | 10/2 | .4 | .6 |
7/16 | .5 | .7 | 2/10 | .4 | .2 | 10/3 | 1.1 | 1.1 |
7/17 | ‒.5 | ‒.3 | 2/11 | .6 | .8 | 10/6 | .1 | ‒.3 |
7/18 | ‒2.2 | 1.1 | 2/12 | ‒.3 | ‒.1 | 10/7 | ‒2.2 | ‒.3 |
7/19 | ‒.9 | ‒.7 | 2/15 | 1.1 | 1.2 | 10/8 | .5 | .5 |
7/20 | ‒1.0 | ‒1.1 | 2/16 | .5 | .5 | 10/9 | ‒.3 | ‒.2 |
7/23 | .7 | .5 | 2/17 | ‒.3 | ‒.2 | 10/10 | .3 | .1 |
7/24 | .2 | .1 | 2/18 | .3 | .2 | 10/13 | .0 | ‒.1 |
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