How does the death of a key executive affect a company? This question was addressed by two researchers. In particular, they wanted to know how the stock market would react to the deaths of the chief executive officer and/or chairman of the board of companies whose stock trades over the counter. A sample of 21 companies whose CEO or chairman died during a 17-year period from 1966 to 1982 was selected. For each company, the weekly stock returns were recorded for 55 weeks prior to the executives’ deaths and for 5weeks after. A market model was used to determine expected returns, and the difference between the actual and expected returns was calculated. These are called abnormal returns. The abnormal returns for each company for the periods 3 weeks prior to the deaths and 5 weeks after are stored in a file on the course web site(Assignment_2_data.xls, on the “Case 2” tab).Under stable conditions, the average abnormal return should equal zero, and we should observe an equal number of positive and negative abnormal returns. The researchers believed that in the weeks before the deaths (t = -3, -2, -1) the abnormal returns would indicate stable conditions. However, after the deaths (t = 0, 1, 2, 3, 4, 5), they would exhibit the effects of bad news—the abnormal returns would be negative. Required: (Keep 4 decimal places if it is necessary.) 1. Is there enough evidence at 5% significance level to show that the mean abnormal return is equal to zero prior to the death of a key executive and less than zero afterward? 2. Is there enough evidence at 5% significance level to show that the proportion of negative abnormal returns is equal to 50% prior to the death of a key executive and greater than 50% afterward?