What is Parametric Test

This chapter introduces the running of the event study analysis and calculating the abnormal returns causally connected to the event being studied. The author does not examine the cross-sectional regression, but instead focuses on the key elements, design decisions, and analytical steps required to calculate the abnormal returns. This includes evaluating estimation windows, event windows, and the estimation model of the normal and abnormal returns. Following this, he examines a range of different test statistics that can be used to determine whether the estimated abnormal returns are statistically significantly different from zero, allowing you to make a conclusion. The focus is on using software tools and interpretation rather than the mathematical treatment and calculations behind estimating abnormal returns and statistics.