This paper analyzed the issue of why large commodity futures traders hold a large percentage of their portfolios in straddle positions where, for the most part, such behavior implies that they are holding assets with negative expected returns. It showed that an earlier paper by Schrock [2], which suggested that such behavior provided a means by which investors could enhance their risk-return tradeoffs, provided only a partial explanation for this behavior which, in a world of positive interest rates, held only under fairly restrictive conditions. Thus, it went on to develop a more general result which strongly suggests that differentially low margin requirements on straddle positions provide a strong incentive in a world of positive interest rates for investors to hold commodity straddle positions. With some modification the model developed in this paper can be used to derive similar conclusions for certain classes of transactions in the stock options market.

Journal Article Economics of Depletable Resources: Market Forces and Intertemporal Bias Get access James L. Sweeney James L. Sweeney Federal Energy Administration and Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 1, February 1977, Pages 125–141, https://doi.org/10.2307/2296977 Published: 01 February 1977 Article history Received: 01 August 1974 Accepted: 01 February 1976 Published: 01 February 1977

This paper uses the Capital Asset Pricing Model to link the financial policy of the firm with the firm's real decisions including output, input mix, and investment. Whereas the M-M leverage theorems were derived for a given set of real decisions, this paper considers the impact of leverage on firm optimization when interest is tax-deductible. In general, leverage impacts upon factor proportions, capital stock, and output decisions. In the final proposition, the author demonstrates that the ‘cost of capital’ need not decline with leverage even in perfect capital markets and with default-free debt.

Functional fixation, Reporting variance, Inventory valuation, Learning effects

Auditing, Sampling, Composite accounts, Bayesian model

Annual earnings, Time-series, Random walk, Predictive ability

In recent years, there has been a growing recognition of the inadequacies of historical cost accounting and of the need to move toward a current value system. An important development in this process was the publication in the United Kingdom of the report of the Inflation Accounting Committee chaired by F. E. P. Sandilands. This report recommends: Accounts drawn up in accordance with the principles of Current Cost Accounting [CCA] should as soon as practicable become the basic published accounts of companies.' The Committee advocated index numbers as a principal method of revaluing plant, machinery, stocks, and work in progress. The purpose of this paper is to present some empirical evidence concerning the commonality among the set of nineteen official government price indices of capital expenditure on plant and machinery2

I. Introduction, 81.—II. Bureaucratization, 82.—III. Personnel serving the market function, 86.—IV. Expenditure of shopping time, 91.—V. Some broader issues, 98.—VI. Summary, 100.—Statistical notes, 100.