Reviews the book "Strategic Planning Systems," by Peter Lorange and Richard F. Vancil.

The article presents the author's reply to Professor R.M. Piper's comments on his paper "A Note on the Joint Variance." Piper raises the question of whether the three-variance method should be taught at all. The value of bringing the joint variance into classroom discussions of variance analysis is twofold. First, there are a number of possible treatments of this variance, and consideration of these alternatives is impossible without its explicit recognition. According to Piper, since the joint variance cannot be controlled by a single manager, it should not be assigned to any single manager. However, such treatment of the joint variance requires its recognition and separation. Thus, Piper himself seems to provide the requested rationalization for the three-variance analysis. The second reason for discussing the joint variance is so that students will recognize that the two-variance method commonly used and taught implicitly treats the joint variance as part of the price variance. This recognition may also help students remember that the multiplier of the price variance is actual quantity while the multiplier of the quantity variance is standard price, as opposed to alternative combinations.

Empirical research has played an important role in recent theoretical developments in the theory of finance, particularly in the formulation and testing of various theories of capital asset pricing. A common procedure in much of that empirical research is to use historical price and dividend data to estimate the parameters of a characteristic line which relates the return on an asset or portfolio to the return on the market. While several possible limitations of such procedures have been explored, one recurring question is the appropriate length of each interval used in the estimation. The purpose of this study is to investigate intervaling in greater detail so as to better understand its impact on the results of empirical research and hence of further developments in the field of finance. This is accomplished by examining the effect of different intervals on the return distributions and estimated characteristic lines of 200 common stocks over the two decades 1950–1969. Section II reviews the relevant literature and attempts to place the intervaling effect in perspective. Research design for the investigation is described in Section III, and findings are presented in Section IV. A brief conclusion appears as Section V.

Reviews the book "Accounting: The Basis for Business Decisions," by Walter B. Meigs, Charles E. Johnson and Robert F. Meigs.

This paper presents the results of an evaluation of the role of real cash balances as a factor input for 11 two-digit SIC code industries over the period 1952-73. Using a four-factor translog cost function for each industry along with duality theory, it was possible to estimate the partial elasticities of substitution and the elasticities of demand for all factors. The substitution elasticities between real cash balances and production labor as well as with capital were found to be significantly different from zero. The interest elasticity of demand for each varies with industry and ranges from -.22 to -.41. The overall findings suggest that the neoclassical model offers considerable promise for modeling the firm's demand for money.

Sanford Baum, Robert C. Carlson, James V. Jucker, Some Problems in Applying the Continuous Portfolio Selection Model to the Discrete Capital Budgeting Problem, The Journal of Financial and Quantitative Analysis, Vol. 13, No. 2 (Jun., 1978), pp. 333-344