Unformatted text preview: return), whereas at day 0 when the new information is released the abnormal return is equal to 3 percent.
The adjustment in the stock price is immediate. In the days following the release of information there is no
further drift in the stock price, either upward or downward. Download free ebooks at bookboon.com
51 Corporate Finance Market efﬁciency Cumulative abnormal return Figure 7: Stock price reaction to news announcement 4
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Download free ebooks at bookboon.com 52 Corporate Finance Market efﬁciency 7.1.3 Strong...
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This note was uploaded on 10/26/2012 for the course 19 19 taught by Professor - during the Spring '12 term at Sunway University College.
- Spring '12