Also known as: AR., AR+
AR stands for various terms. Discover the full forms, meanings, and possible interpretations of AR across different fields and industries.
An abnormal return, often referred to in the context of financial markets, signifies the difference between the actual return of a security and its expected return, based on its risk level as predicted by a market model. This concept is pivotal in event studies, where researchers aim to determine the impact of specific events on stock prices.
The calculation of abnormal returns is foundational in assessing the efficiency of markets, as it helps in identifying whether all available information is reflected in stock prices. By analyzing these returns, investors and analysts can gauge the effect of unforeseen events, such as earnings announcements or regulatory changes, on the valuation of securities. This method provides a quantitative measure to isolate the event's impact from market-wide movements.
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