Tech Stock Valuation

Given the relatively small number of buy–sell decisions in some portfo-

lios, a nonparametric rank test statistic is also considered that is based upon

median abnormal returns that extends a similar test suggested by Corrado

(1989). This rank test treats the estimation period and the event period as a

single time series and assigns a rank to each daily (or multiple-day event

period) return for each firm. Let K

jt

represent the rank of abnormal return AR

jt

in the time series of D

j

+ E

j

abnormal returns of stock j. E

j

is the number of

nonmissing returns on stock j in the event period. If there are no missing

returns, E

j

= E (for event periods of one, two, or ...