Suppose a company announces a bid to acquire a smaller rival on a day that macroeconomic news indi

Suppose a company announces a bid to acquire a smaller rival on a day that macroeconomic news indicated that inflation was picking up. On the day of both announcements, the firm’s return was –0.55% while the market return was –0.48%. The daily CAPM market model coefficients for the firms are ? = 0.05 and ? = 0.8. Using the market model and the market adjusted model, determine abnormal returns for the firm and thereby assess whether the acquisition announcement represented good or bad news for the firm.