bluuebunny/crossref_metadata_2025 huggingface dataset:
Effects of caffeine on circadian phase, amplitude and period evaluated in cells in vitro and peripheral organs in vivo in PER2::LUCIFERASE mice
Authors: Narishige Seira , Kuwahara Mari , Shinozaki Ayako , Okada Satoshi , Ikeda Yuko , Kamagata Mayo , Tahara Yu , Shibata Shigenobu
Published: August 2014

Background and Purpose

Caffeine is one of the most commonly used psychoactive substances. Circadian rhythms consist of the main suprachiasmatic nucleus (SCN) clocks and peripheral clocks. Although caffeine lengthens circadian rhythms and modifies phase changes in SCN‐operated rhythms, the effects on caffeine on the phase, period and amplitude of peripheral organ clocks are not known. In addition, the role of cAMP/Ca2+ signalling in effects of caffeine on rhythm has not been fully elucidated.

Experimental Approach

We examined whether chronic or transient application of caffeine affects circadian period/amplitude and phase by evaluating bioluminescence rhythm in PER2::LUCIFERASE knock‐in mice. Circadian rhythms were monitored in vitro using fibroblasts and ex vivo and in vivo for monitoring of peripheral clocks.

Key Results

Chronic application of caffeine (0.1–10 mM) increased period and amplitude in vitro. Transient application of caffeine (10 mM) near the bottom of the decreasing phase of bioluminescence rhythm caused phase advance in vitro. Caffeine (0.1%) intake caused a phase delay under light–dark or constant dark conditions, suggesting a period‐lengthening effect in vivo. Caffeine (20 mg·kg−1) at daytime or at late night‐time caused phase advance or delay in bioluminescence rhythm in the liver and kidney respectively. The complicated roles of cAMP/Ca2+ signalling may be involved in the caffeine‐induced increase of period and amplitude in vitro.

Conclusions and Implications

Caffeine affects circadian rhythm in mice by lengthening the period and causing a phase shift of peripheral clocks. These results suggest that caffeine intake with food/drink may help with food‐induced resetting of peripheral circadian clocks.
σ1 receptors activate astrocytes via p38 MAPK phosphorylation leading to the development of mechanical allodynia in a mouse model of neuropathic pain
Authors: Moon J Y , Roh D H , Yoon S Y , Choi S R , Kwon S G , Choi H S , Kang S Y , Han H J , Beitz A J , Oh S B , Lee J H
Published: August 2014

Background and Purpose

Spinal astrocytes have emerged as important mechanistic contributors to the genesis of mechanical allodynia (MA) in neuropathic pain. We recently demonstrated that the spinal sigma non‐opioid intracellular receptor 1 (σ1 receptor) modulates p38 MAPK phosphorylation (p‐p38), which plays a critical role in the induction of MA in neuropathic rats. However, the histological and physiological relationships among σ1, p‐p38 and astrocyte activation is unclear.

Experimental Approach

We investigated: (i) the precise location of σ1 receptors and p‐p38 in spinal dorsal horn; (ii) whether the inhibition of σ1 receptors or p38 modulates chronic constriction injury (CCI)‐induced astrocyte activation; and (iii) whether this modulation of astrocyte activity is associated with MA development in CCI mice.

Key Results

The expression of σ1 receptors was significantly increased in astrocytes on day 3 following CCI surgery. Sustained intrathecal treatment with the σ1 antagonist, BD‐1047, attenuated CCI‐induced increase in GFAP‐immunoreactive astrocytes, and the treatment combined with fluorocitrate, an astrocyte metabolic inhibitor, synergistically reduced the development of MA, but not thermal hyperalgesia. The number of p‐p38‐ir astrocytes and neurons, but not microglia was significantly increased. Interestingly, intrathecal BD‐1047 attenuated the expression of p‐p38 selectively in astrocytes but not in neurons. Moreover, intrathecal treatment with a p38 inhibitor attenuated the GFAP expression, and this treatment combined with fluorocitrate synergistically blocked the induction of MA.

Conclusions and Implications

Spinal σ1 receptors are localized in astrocytes and blockade of σ1 receptors inhibits the pathological activation of astrocytes via modulation of p‐p38, which ultimately prevents the development of MA in neuropathic mice.
Building capacity for rigorous controlled trials in autism: the importance of measuring treatment adherence
Authors: McConachie H. , Fletcher‐Watson S. ,   Working Group 4, COST Action ‘Enhancing the Scientific Study of Early Autism’
Published: August 2014

Research groups across Europe have been networking to share information and ideas about research on preschool children with autism. The paper describes preliminary work to develop capacity for future multi‐site randomized controlled trials of early intervention, with a specific focus on the need to measure treatment adherence where parents deliver therapy. The paper includes a review of randomized and controlled studies of parent‐mediated early intervention from two sources, a recent Cochrane Collaboration review and a mapping of European early intervention studies in autism published since 2002. The data extracted focused on methods for describing parent adherence, that is, how and to what extent parents carry out the strategies taught them by therapists. Less than half of the 32 studies reviewed included any measure of parent adherence. Only seven included a direct assessment method. The challenges of developing pan‐European early intervention evaluation studies are discussed, including choice of intervention model and of important outcomes, the need for translation of measurement tools and achievement of joint training to reliability of assessors. Measurement of parent–child interaction style and of adherence to strategies taught need further study.
Population ecology of heterotypic tumour cell cultures
Authors: Sega M. , Chignola R.
Published: August 2014

Objectives

Here, we propose a population ecology perspective to describe dynamic interplay between human leukaemia and cervical cancer cells growing together in the same environment.

Materials and methods

MOLT‐3 (human T‐lymphoblastic leukaemia) and HeLa (human cervical adenocarcinoma) cells were grown together or alone. Living cells were measured using flow cytometry, by counting propidium iodide‐negative cells either CD5+ (MOLT‐3) or CD55+ (HeLa). We developed a mathematical model to take into account possible interactions between cells and among cells and their environmental niches. Model equations were then fitted to growth data.

Results

Ecological interactions that require direct cell contact and indirect mechanisms acting on cell niches, successfully modelled cell population growth. Predicted heterotypic adhesion between the two different cell types was demonstrated experimentally.

Conclusions

Theoretical ecology can be assayed using human cells and, most importantly, it can provide a conceptual framework to describe and understand evolution of mixed tumour cell populations.
Reduced sexual functionality of PI‐Wolbachia‐infected females of Tetrastichus coeruleus
Authors: Reumer Barbara M. , van Alphen Jacques J.M. , Kraaijeveld Ken
Published: August 2014

Wolbachia are endosymbiotic bacteria known to manipulate the reproduction of their hosts by, for example, inducing parthenogenesis. In most cases of Wolbachia‐induced parthenogenesis, the infection is fixed and the entire host population consists of females. In the absence of males and sexual reproduction, genes involved in sexual reproduction are not actively maintained by selection. Accumulation of neutral mutations or selection against maintenance of sexual traits may lead to their loss or deterioration. In addition, females may lose the ability to reproduce sexually due to ‘functional virginity mutations’ that may spread concomitantly with the Wolbachia infection through a population. The parasitoid wasp Tetrastichus coeruleus (Nees) (Hymenoptera: Eulophidae) forms an ideal model to study the decay of sexual functionality, because it has both Wolbachia‐infected, parthenogenetic populations and uninfected, sexual populations. We compared several components of sexual functionality of arrhenotokous (sexual) and thelytokous (parthenogenetic) T. coeruleus females. First, we tested whether arrhenotokous and thelytokous females were equally attractive and receptive to males. Second, we examined whether mating is costly to females by measuring the life span of mated and virgin females. Last, we studied the morphology of the spermathecae of arrhenotokous and thelytokous females. Mated females had shorter life spans than virgin females, showing that mating carried a fitness cost. Two sexual traits of thelytokous females have degraded compared to arrhenotokous females. Arrhenotokous and thelytokous females were equally attractive to males, but thelytokous females were unreceptive to males. Furthermore, there was a clear difference in spermathecal morphology between arrhenotokous and thelytokous females. Our data do not allow distinction between the various potential causes of such degradation. Although the longevity cost of mating may indicate selection against the maintenance of costly sexual traits, accumulation of neutral mutations, functional virginity mutations, manipulation by Wolbachia, and/or the genetic distance between the two populations may all have contributed to the decay of sexual traits in thelytokous females.
Analysis of the yeast short‐term Crabtree effect and its origin
Authors: Hagman Arne , Säll Torbjörn , Piškur Jure
Published: August 2014

The short‐term Crabtree effect is defined as the immediate occurrence of aerobic alcoholic fermentation in response to provision of a pulse of excess sugar to sugar‐limited yeast cultures. Here we have characterized ten yeast species with a clearly defined phylogenetic relationship. Yeast species were cultivated under glucose‐limited conditions, and we studied their general carbon metabolism in response to a glucose pulse. We generated an extensive collection of data on glucose and oxygen consumption, and ethanol and carbon dioxide generation. We conclude that the Pichia, Debaryomyces, Eremothecium and Kluyveromyces marxianus yeasts do not exhibit any significant ethanol formation, while Kluyveromyces lactis behaves as an intermediate yeast, and Lachancea, Torulaspora, Vanderwaltozyma and Saccharomyces yeasts exhibit rapid ethanol accumulation. Based on the present data and our previous data relating to the presence of the long‐term Crabtree effect in over 40 yeast species, we speculate that the origin of the short‐term effect may coincide with the origin of the long‐term Crabtree effect in the Saccharomycetales lineage, occurring ~ 150 million years ago.
Cancer stem cells – important players in tumor therapy resistance
Authors: Colak Selcuk , Medema Jan P.
Published: August 2014

Resistance to tumor therapy is an unsolved problem in cancer treatment. A plethora of studies have attempted to explain this phenomenon and many mechanisms of resistance have been suggested over recent decades. The concept of cancer stem cells (CSCs), which describes tumors as hierarchically organized, has added a new level of complexity to therapy failure. CSCs are the root of cancers and resist chemo‐ and radiotherapy, explaining cancer recurrence even many years after therapy is ended. This review discusses briefly CSCs in cancers, gives an overview of the role of CSCs in therapy resistance, and discusses the potential means of targeting these therapy‐resistant tumor cells.
The Nile perch fishery ofLakeVictoria: current status and management challenges
Authors: Mkumbo O. C. , Marshall B. E.
Published: August 2014

The Nile perch,Lates niloticus(L.), stock in Lake Victoria may be showing signs of overfishing as the average size of fish decreased rapidly in 2007 when the stock biomass fell by 50%. Fishers have increasingly abandoned large‐meshed gillnets in favour of small hooks on long lines. This has allowed prey species (Rastrineobola argentea[Pellegrin] and haplochromines) to increase, shifting the fishery to one dominated by species at lower trophic levels. These changes do not reflect deterioration in the environment because evidence suggests that conditions in the lake have improved and prey species sensitive to deoxygenation have increased. Management authorities have been criticised for relying only on the control of fishing effort rather than taking a holistic approach. However, fishing effort appears to be the main cause of the fishery problems and is the only aspect that can be controlled as environmental problems are too intractable.
Genetics of gene expression characterizes response to selective breeding for alcohol preference
Authors: Hoffman P. L. , Saba L. M. , Flink S. , Grahame N. J. , Kechris K. , Tabakoff B.
Published: August 2014

Numerous selective breeding experiments have been performed with rodents, in an attempt to understand the genetic basis for innate differences in preference for alcohol consumption. Quantitative trait locus (QTL) analysis has been used to determine regions of the genome that are associated with the behavioral difference in alcohol preference/consumption. Recent work suggests that differences in gene expression represent a major genetic basis for complex traits. Therefore, the QTLs are likely to harbor regulatory regions (eQTLs) for the differentially expressed genes that are associated with the trait. In this study, we examined brain gene expression differences over generations of selection of the third replicate lines of high and low alcohol‐preferring (HAP3 and LAP3) mice, and determined regions of the genome that control the expression of these differentially expressed genes (deeQTLs). We also determined eQTL regions (rveQTLs) for genes that showed a decrease in variance of expression levels over the course of selection. We postulated that deeQTLs that overlap with rveQTLs, and also with phenotypic QTLs, represent genomic regions that are affected by the process of selection. These overlapping regions controlled the expression of candidate genes (that displayed differential expression and reduced variance of expression) for the predisposition to differences in alcohol consumption by the HAP3/LAP3 mice.
THE DISPERSION OF BIDS ON INDIVIDUAL NEW MUNICIPAL ISSUES
Authors: Benson Earl D.
Published: August 2014

This paper examines the determinants of the dispersion of interest rates bid on competitively sold, new municipal issues. Theory suggests that the dispersion of prices (interest rates) on a new municipal issue depends on the expected costs and benefits of underwriter search on that issue. The greater the expected costs and the lower the expected benefits, the smaller will be underwriter search and the greater will be municipal interest rate dispersion. For empirical testing, the expected costs and benefits of underwriter search are measured by characteristics of the bond issue, the bond issuer, and the market conditions. The empirical tests suggest that the theory holds.
STOCK MARKET RETURNS AND INFLATIONARY EXPECTATIONS: ADDITIONAL EVIDENCE FOR 1975–1979
Authors: Chu Chen‐Chin , Whitford David T.
Published: August 2014

This research investigates the impacts that inflationary expectations and errors in those expectations had upon the stock market during 1975 to 1979. Expected rates of inflation were obtained via (1) Box‐Jenkins time‐series analysis and (2) naive extrapolation. Statistical analysis indicates only weak support for a Fisher effect in determining stock prices. However, the analysis consistently indicates that unanticipated changes in inflation are negatively related to stock market returns.
SINGLE‐PERIOD MEAN‐VARIANCE IN A MULTIPERIOD CONTEXT
Authors: Upton David E.
Published: August 2014

It is not readily apparent that the single‐period mean and variance are sufficient to specify the investor choice problem when the investor horizon is greater than one period. It is pointed out that the standard justifications for use of single‐period mean‐variance analysis are inconsistent with the assumptions usually made in the multiperiod problem. It is argued, however, that if the investor horizon is long enough, the single‐period mean and variance will be approximately sufficient. The argument is much less restrictive than the standard justifications for the use of single‐period mean‐variance analysis. The predictions of this alternative justification are empirically tested and found to be quite accurate for the time frames found in the literature.
THE ECONOMIC CONSEQUENCES OF ESOPS
Authors: Johnson Ramon E. , Pratt Richard T. , Stewart Samuel S.
Published: August 2014

The purpose of this paper is to assess the economic consequences of Employee Stock Ownership Plans (ESOPs) by developing a general analytical model. The model is used to compare ESOPs with attempts to replicate the effects of ESOPs via alternative arrangements. The general conclusion of the paper is that in the absence of improved employee motivation, ESOP implementation has no particular economic consequence. However, an important exception to this finding may be the inexpensive access to the equity markets for the smaller, non‐public firm provided by the ESOP.
STOCK DIVIDENDS AS SIGNALS
Authors: Woolridge J. Randall
Published: August 2014

This study analyzes stock dividends as signals from managers. It is argued that in the presence of information asymmetries between managers and investors, stock dividends provide a relatively inexpensive and unambiguous signalling device. Based on an examination of the daily returns around 317 stock dividend announcements, it is concluded that these announcements are interpreted by investors as signals from managers. Further analysis also indicates that stock dividend size is positively related to announcement day returns.
BANK HOLDING COMPANY EXPANSION: A REFOCUS ON ITS FINANCIAL RATIONALE
Authors: Frieder Larry A. , Apilado Vincent P.
Published: August 2014

This paper addresses managerial motivation, stockholder motivation, organizational effects of affiliation, and the proper analytical approach to study bank holding companies. A consolidated entity viewpoint is employed. A valuation model is developed and empirically implemented in which important factors such as intra‐organizational effects, service fees, expanded debt capacity, and equity adjustments are considered. These factors have been ignored by conventional studies. In addition, this study's methodology extends considerably that of the prior studies incorporating a consolidated entity valuation approach. A valuation model, despite its requirements for highly specific empirical data, is generally superior over univariate, multivariate, and market models in assessing BHC performance.
AN EXAMINATION OF MERGER SYNERGISM
Authors: Choi Dosoung , Philippatos George C.
Published: August 2014

The empirical research discussed in this paper measures the synergistic effects of mergers on the stockholders of the acquiring and acquired firms. Synergism is defined as the incremental wealth to the shareholders of both merging firms due to the merger—net of any potential gains achievable through investors' personal diversification over the common stocks of the merging firms. Three types of mergers are identified and studied—nonconglomerate, conglomerate with increasing financial leverage, and conglomerate with decreasing financial leverage. The results indicate that these types of mergers are affected differently by the combination. Moreover, the evidence suggests operational and/or financial synergism.
DIVERSIFICATION, DOUBLE LEVERAGE, AND THE COST OF CAPITAL
Authors: Pettway Richard H. , Jordan Bradford D.
Published: August 2014

Public utility regulators choose between “double leverage” and “independent company” approaches to determine the cost of equity capital for electric utility holding companies that have diversified and telephone holding companies that have diversified and issued parent debt. Dissimilarities between these two approaches result in significant differences in cost of capital estimates, in allowed rates of return, and in prices of utility services. No valid support for the “double leverage” approach is found after an analysis of descriptive examples and a general theoretical examination of the two approaches compared against established goals of rate of return regulation. The “independent company” approach is shown to be universally correct. The authors suggest, therefore, that only the “independent company” approach should be employed in rate of return cases of regulated public utilities whose parents own subsidiaries with unequal risk and/or whose parent has its own debt.
THE INTERACTION BETWEEN PRICING AND UNDERWRITING SPREAD IN THE NEW ISSUE CONVERTIBLE DEBT MARKET
Authors: Stover Roger D.
Published: August 2014

The objective of this research is to measure the interaction among pricing variables in new issues of convertible debt. In underwriting convertible debt issues, there is a simultaneous tradeoff among the conversion premium, yield, and underwriting spread. Since the three endogenous variables are interrelated, a simultaneous equation model is used to test for this interaction. Based on a sample of 264 new convertible debt offerings, the results indicate underpricing in terms of conversion premium and yield as well as simultaneous increases in yield and underwriting spread.
EVALUATING THE FINANCE JOURNALS: THE DEPARTMENT CHAIRPERSON'S PERSPECTIVE
Authors: Coe Robert K. , Weinstock Irwin
Published: August 2014

Finance department chairpersons report that the role of published research is more important than ever in influencing appointment and promotion decisions of finance professors. This study and one conducted 15 years ago focus on the pivotal role of finance chairpersons in the evaluation of their faculties' journal publications. These studies show that the major factor influencing the finance chairpersons' evaluations of publications is the journal in which an article is published. Journals of high merit are perceived to have low acceptance rates and vice versa. These estimates of perceived acceptance rates are not correlated with actual acceptance rates. Because perceived acceptance rates play a key role in evaluating faculty publications, there is a need for finance chairpersons to know the relative difficulties of publishing in leading finance and related journals.
FINANCIAL STRUCTURE AND FINANCIAL STRATEGY
Authors: Gehr Adam K.
Published: August 2014

Even if the value of the firm is unaffected by its capital structure, managers may have reasons to choose a particular structure. The prices of the firm's securities reflect the “market's” assessment of the value and riskiness of the firm. Should managers disagree with the market's assessment of the firm's risk or value, they will also disagree about the relative returns on the firm's securities. Concern about shareholder welfare may, therefore, lead them to prefer a specific capital structure. If managers believe the market has underestimated the firm's value, they will prefer debt financing; if the market has overestimated risk, they will prefer equity; and, if managers disagree about both risk and value, they may prefer to finance using both debt and equity.
THE ANOMALOUS AND ASYMMETRIC NATURE OF EQUITY RETURNS: AN EMPIRICAL SYNTHESIS
Authors: Beedles William L.
Published: August 2014

On the basis of seemingly anomalous common stock returns, several authors have concluded that the mean and variance testing paradigm is incomplete and that an unspecified missing factor or factors exist. This work advances distributional asymmetry as a reasonable explanation of the empirical results. This position is supported by evidence indicating that “variance,” “size,” and “price per share” effects are more closely associated with the second and third moments than with the first and second.
AN EMPIRICAL STUDY OF THE DIFFUSION PROCESS OF SECURITIES AND PORTFOLIOS
Authors: Ang James S. , Peterson David R.
Published: August 2014

The nature of the stochastic process generating the path of security prices through time plays an important role in dynamic theories of financial economics. An important consideration is the possible dependency of return variances on price levels. Using 55 years of data separated into five‐year intervals, this study demonstrates that, in general, security and portfolio variances are dependent on stock price levels and the relationship is a function of portfolio size. The relationship is unstable over time. The results suggest possible detrimental effects of diversification and financial models based on log‐normality are questionable.
THE INFLUENCE OF OFFERING YIELD ON UNDERWRITING SPREAD
Authors: Marr M. Wayne , Thompson G. Rodney
Published: August 2014

This paper presents a model that explains variation in underwriting spreads among primary issues of investment quality bonds and assesses the impact that offering yields have on underwriting spreads. The results indicate that issues having higher (lower) offering yields pay lower (higher) underwriting spreads.
CHANGES IN CAPITAL STRUCTURE, NEW EQUITY ISSUES, AND SCALE EFFECTS
Authors: Kolodny Richard , Suhler Diane Rizzuto
Published: August 2014

This study determines the impact of a new issue of common stock on security holder wealth and the magnitude attributable to transaction costs, tax shield dilution, wealth transfers, and informational content. The empirical results indicate that shareholders of firms announcing new equity issues experience significant, abnormal, negative returns.

The per share transaction cost accounts for 22.6 percent of the observed abnormal return. The tax shield dilution effect accounts for 7.8 percent. No evidence of a wealth transfer effect is found. Thus, approximately 70 percent of the abnormal return can be attributed to new unfavorable information that becomes available to the market.
FACTORS INFLUENCING THE NEW YORK STOCK EXCHANGE SPECIALISTS' PRICE‐SETTING BEHAVIOR: AN EXPERIMENT
Authors: Schultz Joseph J. , Gustavson Sandra G. , Reilly Frank K.
Published: August 2014

This study uses an experimental approach to analyze variables hypothesized to influence specialists' behavior in establishing opening prices on the New York Stock Exchange. Participants in this study are actual NYSE specialists. A factorial design is employed, and data are analyzed using the analysis of variance model. Current demand and supply data are shown to have the most significant impact on specialists' decisions, with limit order book information and inventory position also proving to be significant and consistent for specialists participating in the study.
BANK HOLDING COMPANY ACQUISITIONS, STOCKHOLDER RETURNS, AND REGULATORY UNCERTAINTY
Authors: Desai Anand S. , Stover Roger D.
Published: August 2014

This paper examines the returns accruing to the bank holding company (BHC) stockholders when an acquisition is initiated by the BHC. There is a significant, positive abnormal return to these shareholders when the acquisition is announced. The magnitude of this return does not depend on the relative size of the acquired firm. Further, the regulatory environment for these BHC acquisitions introduces uncertainty about the eventual outcome of the review process. Upon approval from the Federal Reserve Board (FRB), the BHC stockholders earn an additional, significantly positive abnormal return.
THE WEALTH EFFECTS OF VOLUNTARY SELLOFFS: IMPLICATIONS FOR DIVESTING AND ACQUIRING FIRMS
Authors: Zaima Janis K. , Hearth Douglas
Published: August 2014

Previous research examining the wealth effects of voluntary selloffs has shown positive stock price movements around the announcement date for divesting firms. Shareholders realize positive economic gains from selloffs. One recent study indicates that shareholders of acquiring firms also realize economic gains. This study examines the division of economic gains between divesting and acquiring firms and the impact of the firm's financial condition and relative selloff size on the level of economic gains. Significant positive price movements are observed for divesting firms immediately prior to and on the announcement date. Some evidence of positive, although not significant, price movements is found for acquiring firms. These results suggest shareholders of divesting firms realize economic gains from selloffs while shareholders of acquiring firms neither gain nor lose. Also, as divesting firms sell off larger portions of their total assets, their shareholders realize greater economic gains; the division of economic gains becomes more one‐sided (in favor of divesting firms) as the relative size of the selloff increases.
NEW ESTIMATES OF THE TERM STRUCTURE OF INTEREST RATES: 1920–1939
Authors: Thies Clifford F.
Published: August 2014

New estimates of the term structures of interest rates for the inter‐war period are constructed using a McCulloch‐type bond pricing model. The new estimates are compared to the Durand Basic Yields. The Basic Yields are found to be poor estimates: being oversmoothed, wiping out humped term structures, and emasculating the liquidity premium. In contrast, the new estimates appear to behave very much like post‐war term structures: exhibiting humps at cyclic peaks and evidence of a liquidity premium.
THE ANNOUNCEMENT EFFECTS OF PREFERRED STOCK RE‐RATINGS
Authors: Davidson Wallace N. , Glascock John L.
Published: August 2014

This paper examines the equity return behavior of firms whose preferred stock ratings have been changed by Standard and Poor's. The evidence indicates that the market anticipates the re‐ratings by approximately 40 days for the complete sample. However, the downgrades for the utility subsample do not experience any downward drift before or after the re‐rating. In general, these results support the previous findings of Pinches and Singleton (1978) and Weinstein (1977).
THE IMPACT OF CREDITWATCH PLACEMENT ON EQUITY RETURNS AND BOND PRICES
Authors: Wansley James W. , Clauretie Terrence M.
Published: August 2014

This paper examines the equity returns and bond prices of firms around the dates of their placement on CreditWatch by Standard and Poor's. Bond prices and equity returns for companies listed on CreditWatch are compared with a set of firms whose debt was rerated during the same time period but were never placed on CreditWatch. The evidence indicates no market reaction when firms are listed on CreditWatch with subsequent rating affirmations, but a significant reaction exists in those cases where the listing was followed by downgradings. Furthermore, the bond market does not appear so efficient as the stock market since relative bond prices continue to decline as long as seven months after a rating change.
EXPECTATIONS, INTEREST RATES, AND COMMERCIAL BANK STOCKS
Authors: Booth James R. , Officer Dennis T.
Published: August 2014

This study examines the effect of current and expected interest rate changes on bank equity values and attempts to reconcile the conflicting findings of previous research regarding this issue. A multiple index market model of bank security returns is specified and estimated. The results confirm the existence of an interest rate effect on bank stocks that is not explained by returns on the market portfolio. In addition, bank stock returns appear to be sensitive to an interest rate forecast error.
THE RELATION BETWEEN RETURNS, OWNERSHIP STRUCTURE, AND MARKET VALUE
Authors: Lloyd William P. , Jahera John S. , Goldstein Steven J.
Published: August 2014

Numerous empirical studies have documented the small firm effect of higher risk‐adjusted returns for small firms in contrast to large firms. The explanation for such a phenomenon remains incomplete. This research examines the relationship among ownership structure, size, and returns under the hypothesis that firms with diffuse ownership (manager controlled) have higher returns to compensate for the risk inherent in the agency relationship. This research adds a dimension to the explanation of the small firm effect, which is well‐founded in economic theory but has not been tested. The results indicate no significant relationship between ownership and return.
ANNOUNCEMENT EFFECTS OF WITHDRAWN SECURITY OFFERINGS: EVIDENCE ON THE WEALTH REDISTRIBUTION HYPOTHESIS
Authors: Officer Dennis T. , Smith Richard L.
Published: August 2014

This paper employs the comparison period returns approach to examine issuance and withdrawal announcement effects for stock portfolios of firms announcing equity or debt issues that are subsequently withdrawn. In contrast to previous literature, which generally attributes financing announcement effects to capital structure changes, the conclusion of this paper is that security price changes at the time an issue is announced or withdrawn prevent wealth redistributions between insiders and outsiders. Empirical findings are inconsistent with the interpretation of announcement effects as capital structure effects.
PORTFOLIO CHOICES, CONSUMPTION, AND PRICES IN A MARKET WITH DURABLE ASSETS
Authors: Bosch J. C.
Published: August 2014

Recent research in investments has focused almost exclusively on financial assets such as corporate stocks. Although durable assets constitute an important part of investors' holdings, little effort has been made to explore their role in individuals' investments decisions and on assets pricing. This paper establishes results concerning the role of durable assets in the determination of optimum portfolio choices. The paper explores the effect of consumption considerations related to the service flows generated by durable assets on optimum portfolio considerations and asset prices. The main result is tied to the existence, or lack thereof, of efficient rental markets. In the absence of rental markets (or with restrictions on renting), investors' portfolio choices are not independent of consumption considerations as they are assumed to be in the standard CAPM. Individuals may thus hold different portfolios, and prices reflect the owner's inability to trade consumption flows. Under perfect market assumptions with unrestricted rental markets, optimum portfolio choices are undistinguishable from those implied by the standard CAPM in the sense that they are mean‐variance efficient and identical for all individuals. Consumption is adjusted by trading service flows in the rental market. Prices, and the price of risk, however, reflect the existence of durable assets service flows as well as the risks involved in trading these flows in the rental market. In the model, risky rental income is introduced by uncertain rental costs. Equilibrium rental rates, an important part of the return expected from holding durable assets, are determined in the context of the mean‐variance framework as a function of return and undiversifiable risk.
A PROGRAMMING MODEL FOR BANK HEDGING DECISIONS
Authors: Booth G. Geoffrey , Koveos Peter E.
Published: August 2014

This study constructs, solves, and interprets a normative model that focuses on the risk management needs of a banking institution. The optimization model is a prototype, and it explicitly incorporates uncertainty via the two‐stage linear programming format. Both the traditional asset‐liability management and the newer hedging risk management strategies are included. The model suggests that although the specific risk management strategy mix depends on the economic scenario, hedging should be actively considered as a workable strategy.
RECENT EVIDENCE ON THE ACCURACY AND RATIONALITY OF POPULAR INFLATION FORECASTS
Authors: Leonard David C. , Solt Michael E.
Published: August 2014

This paper compares the accuracy and examines the rationality of inflation forecasts extracted from U.S. Treasury bill yields, the mean forecast of surveys conducted by the Institute for Social Research, and the predictions from a rolling time‐series model. Measures of realized inflation include both the Consumer Price Index reported during the period and a revised CPI series (CPIX) that replaces the mortgage interest rate with the recently adopted “rental equivalence” component. Inferences about accuracy and rationality depend upon both the measure of inflation and the period studied. The findings suggest that survey forecasts should be used when turbulent variation in the unobservable expected real rate of interest obscures the measurement of the market's expectation of inflation.
NON‐REPRESENTATIVE TRADING FREQUENCIES AND THE DETECTION OF ABNORMAL PERFORMANCE
Authors: Atchison Michael D.
Published: August 2014

Numerous studies employ betas computed with the ordinary least squares technique and daily returns. However, betas computed with OLS and daily returns are biased and inconsistent due to nonsynchronous trading periods or differences in trading frequency. The purpose of this study is to evaluate the effect of trading frequency on event studies. Brown and Warner (1985) investigated this and several other problems associated with daily returns and found no effect. However, they did not analyze the trading frequencies of the securities in their sample. This study uses a computer simulation for which trading frequency is an input, and, thus, tests stocks with known trading frequency.
OPTION PRICING AND THE ARBITRAGE PRICING THEORY
Authors: Chang Jack S. K. , Shanker Latha
Published: August 2014

This paper applies the arbitrage pricing theory to option pricing. Under certain distribution assumptions or the assumption that there is only one common factor, the underlying asset of an option is the sole risky factor that explains its expected return. Based upon this relationship, a new and simple option‐pricing formula is derived, and some important existing option‐pricing formulae are reproduced. Empirical results show that the new formula performs as well as the Black‐Scholes formula.
THE EFFECT OF VOLUNTARY CORPORATE LIQUIDATION ON SHAREHOLDER WEALTH
Authors: Skantz Terrance R. , Marchesini Roberto
Published: August 2014

This paper presents an analysis of the shareholder wealth effect of voluntary corporate liquidation, the extreme form of corporate divestiture classified as a “selloff.” For a sample of 37 firms that liquidated during the 1970–1982 period, the liquidation announcement is associated with statistically and economically significant stock price increases.
INTEREST RATE RISK HEDGING FOR DUE‐ON‐SALE MORTGAGES WITH EARLY TERMINATION
Authors: Anderson Gary , Chiang Raymond
Published: August 2014

The impact of random early termination on the interest rate elasticity and the related implications of hedging a mortgage security are examined. The common approach to computing duration using average mortgage life is shown to be biased and insufficient. Because the prepayment distributions of mortgages tend to have wide dispersions, substantial errors result from using average mortgage life. These results are also applicable to other financial obligations subject to prepayment.
PRODUCT MARKET STRUCTURE, CAPITAL INTENSITY, AND SYSTEMATIC RISK: EMPIRICAL RESULTS FROM THE THEORY OF THE FIRM
Authors: Jose Manuel L. , Stevens Jerry L.
Published: August 2014

Product market concepts from industrial organization economics are integrated with financial valuation models of the firm to investigate relationships among systematic risk, capital intensity, and product market power. The theory of the firm facing uncertain input and output prices is extended to provide empirical models. Empirical results coincide with hypotheses derived from the theoretical model and pose questions about traditional single period hypotheses found in the finance literature.
ALLOCATING CAPITAL AMONG A FIRM'S DIVISIONS: HURDLE RATES VS. BUDGETS
Authors: Taggart Robert A.
Published: August 2014

This paper examines the merits of alternative systems for allocating capital within a firm. A budget system, whereby top management limits divisional investment, even without full knowledge of the divisions' investment opportunities, can make economic sense. The budget system can be useful when there are externalities among the investments of different divisions and when division managers' estimates of projects' NPVs are subject to unpredictable errors. The budget system is weak, however, in terms of its use of division managers' expertise. As a result, most firms use budgets as only one part of their capital allocation system.
SAMPLING ERROR IN FIRST ORDER STOCHASTIC DOMINANCE
Authors: Stein William E. , Pfaffenberger Roger C. , French Dan W.
Published: August 2014

This study analyzes the standard method of testing for first order stochastic dominance from a statistical viewpoint and applies a boundary crossing algorithm to approximate the resulting error probabilities. Error probabilities can be estimated even when the two distributions are not equal. This approach, which is useful when large sample simulations are not feasible, helps clarify some of the unusual results obtained by Kroll and Levy in an earlier study.
THE VALUATION OF CURRENCY OPTIONS FOR ALTERNATE STOCHASTIC PROCESSES
Authors: Shastri Kuldeep , Wethyavivorn Kulpatra
Published: August 2014

This paper compares the ability of four valuation models — the Pure Diffusion model of Black‐Scholes‐Merton, the Absolute Diffusion and Pure Jump models of Cox‐Ross, and the mixed Jump‐Diffusion model of Merton — to explain the observed behavior of market prices of foreign currency options. The empirical tests are based on a comparison of the pattern of implied volatilities obtained from option market prices and the Black‐Scholes‐Merton model with those expected theoretically if exchange rates follow the four stochastic processes specified above. The results of the comparison show that the pattern of implied volatilities is most consistent with the mixed Jump‐Diffusion model.
INTERSTATE BANK MERGERS: THE EARLY EVIDENCE
Authors: Trifts Jack W. , Scanlon Kevin P.
Published: August 2014

This study examines the wealth effects of interstate bank mergers to both the acquired and acquiring firms' shareholders. While the overall results are consistent with the findings of research on nonfinancial mergers — that acquired firms' shareholders gain and acquiring firms' shareholders break even — there is evidence that the acquiring banks cannot be considered a homogeneous group. Specifically, banks involved in relatively large acquisitions earn positive and statistically significant abnormal returns and significantly outperform those involved in relatively smaller mergers. The results suggest there are differential opportunities for gain from interstate mergers, dependent upon the relative size of the acquisition and the degree to which it expands the geographic market served by the bank.
THE CHOICE AMONG DEBT, EQUITY, AND CONVERTIBLE BONDS
Authors: Billingsley Randall S. , Lamy Robert E. , Thompson G. Rodney
Published: August 2014

The hybrid nature of convertible bonds continues to interest corporate financial managers, investors, and economists. While much theoretical and empirical research examines an issuer's choice between using straight debt and equity, little research evaluates how an issuer chooses among debt, equity, and convertible bonds. This study extends Marsh's [13] research on the differences between debt and equity issuers in the United Kingdom by examining U.S. industrial firms that issue debt, equity, or convertible bonds. It also illustrates how various distinguishing features influence the probability that each security will be issued.
THE VALUE LINE STOCK RANKINGS AND THE OPTION MODEL IMPLIED STANDARD DEVIATIONS
Authors: Tezel Ahmet
Published: August 2014

Here, the relationship between Value Line rankings and option implied standard deviations is investigated. Each Value Line ranking (safety, price stability, timeliness, and earnings predictability) is significantly related to option implied standard deviations for a sample of 62 companies with Value Line timeliness rankings of 1, 2, 4, and 5 and with a total of 1,217 call options traded over a 3‐day period. The index for price stability would be most valuable to investors for assessing future risk since only this index has a significant association with residual implied volatility, i.e., those unexplained by historical volatility.
ECONOMIES OF SCOPE, SYNERGY, AND THE CAPM
Authors: Chang Philip
Published: August 2014

The purpose of this paper is to integrate the multiproduct theory of the firm into financial theories. The relationship between economies of scope and synergy in conglomerate mergers is formally established in the context of the Capital Asset Pricing Model. It also is shown that a competitive market for corporate control would compete these benefits away.
HOLIDAY CLOSINGS AND SECURITY RETURNS
Authors: Pettengill Glenn N.
Published: August 2014

This paper documents unusual return patterns for securities around holiday closings. Returns for trading days immediately before holiday closings (pre‐holiday trading days) are unusually high regardless of weekday, year, or holiday closing. Returns for trading days following holiday closings (post‐holiday trading days) are high only if they occur at the end of the week. Tests indicate that pre‐holiday returns do not respond to a closing effect, and that the post‐holiday returns do not result from a time‐diffusion process. Holiday trading day returns question the tax‐loss selling explanation of the turn‐of‐the‐year effect and display a significant small firm effect outside of January.
FINANCING AND HOUSE PRICES
Authors: Sa‐Aadu J. , Sirmans C. F. , Benjamin John D.
Published: August 2014

Recent empirical evidence on the effect of below‐market financing on house prices has suffered from estimation and interpretation problems. In this paper, a methodology is developed to solve these problems. Using data for mortgage revenue bonds, the methodology is tested with results indicating that all financing subsidy is capitalized into house prices.
IMPACTS OF RELATIVE SIZE AND INDUSTRIAL RELATEDNESS ON RETURNS TO SHAREHOLDERS OF ACQUIRING FIRMS
Authors: Scanlon Kevin P. , Trifts Jack W. , Pettway Richard H.
Published: August 2014

The premise of this paper is that in mergers the manageability of acquisitions significantly affects the wealth of shareholders of acquiring firms. Specifically, the relative size of partners as well as the industrial relatedness of the two firms are examined. The test period allows for the determination of announcement, interim, and consummation effects of the mergers on shareholder wealth. It is found that acquisitions of relatively large firms from unrelated industries lead to significant declines in the wealth of shareholders of acquiring firms, and that this result is most pronounced when the period is extended beyond the announcement through the effective dates.
SKEWNESS AND KURTOSIS IN JAPANESE EQUITY RETURNS: EMPIRICAL EVIDENCE
Authors: Aggarwal Raj , Rao Ramesh P. , Hiraki Takato
Published: August 2014

In this paper, the distribution of equity returns on the Tokyo Stock Exchange is examined from 1965 to 1984, and significant and persistent skewness and kurtosis are found. The deviation of security returns from normality declines with increasing portfolio size and appears to be greater than the non‐normality evidenced in U.S. security returns. Further, these deviations from normality persist even after controlling for January and firm size effects.
STOCHASTIC DOMINANCE AND TRUNCATED SAMPLE DATA
Authors: Ben‐Horim Moshe
Published: August 2014

The purpose of this paper is to examine whether the chance of making erroneous investment decisions can be reduced by applying stochastic dominance rules to truncated, rather than complete, sample data of rates of return. A simulation approach is used that assumes the rates of return follow the symmetric stable probability distribution. Using a variety of relationships between probability distributions of rates of return, it is demonstrated that sample truncation has the potential of significantly reducing sampling errors in the selection between alternative investments.