The cumulative abnormal return for a merger or acquisition can be positive or negative depending on whether the stock in question performs better or worse than what was expected without an acquisition.

Question

Quizplus · Accepted Answer

The cumulative abnormal return can be positive if the stock performs better than expected after a merger or acquisition, or negative if it performs worse. Therefore, the statement is true.

The Cumulative Abnormal Return for a Merger or Acquisition Can