This paper specifies the single-beta capital asset pricing model for the pricing of forward foreign exchange contracts from the point of view of a U.S. investor. Parametric specification of the betas as ARCH-like processes explicitly allows for time variation as well as sign variation of the risk premium in the forward foreign exchange market. I estimate the model jointly for four currencies, using a generalized method of moments procedure. The results show significant time variation for the betas and tests of the overidentifying restrictions are generally favorable to the model.

Theory suggests that shareholders who own blocks of stock have a stronger incentive to invest in voting on corporate issues than nonblockholders. Our evidence indicates that institutional investors and other blockholders vote more actively on antitakeover amendments than nonblockholders, and opposition by institutions is greater when the proposal appears to harm shareholders. Our evidence suggests that institutions that are less subject to management influence, such as mutual funds, foundations, and public-employee pension funds, are more likely to oppose management than banks, insurance companies, and trusts, which frequently derive benefits from lines of business under management control.

This paper develops and tests the uncertain information hypothesis as a means of explaining the response of rational, risk-averse investors to the arrival of unanticipated information. The theory predicts that following news of a dramatic financial event, both the risk and expected return of the affected companies increase systematically, and that prices react more strongly to bad news than good. An empirical investigation of over 9000 marketwide and firm-specific events produces results consistent with these predictions. We conclude that the market reacts to uncertain information in an efficient, if not instantaneous, manner.

This article surveys the seventeen papers in this special issue of the Journal of Financial Economics, and related work. The major findings are: (1) patterns of stock ownership by insiders and outsiders can influence managerial behavior, corporate performance, and stockholder voting in election contests; (2) corporate leverage, inside stock ownership by managers, and the control market are interrelated; (3) departures from one share/one vote affect firm value and efficiency; (4) takeover resistance through defensive restructurings or poison pill provisions is associated with declines in share price; and (5) top management turnover is inversely related to share price performance.

Generally, utilities issue straight fixed-rate preferreds, industrials issue convertible fixed-rate preferreds, and financials issue adjustable-rate preferreds. The corresponding announcement-period common stock abnormal returns are economically insignificant for utilities, negative and significant at the 0.05 level for industrials, and positive and significant at the 0.10 level for financials. Information effects explain the cross-sectional results for industrial firms, but tax benefits and/or regulatory conditions are more likely explanations of the results documented for financial corporations and utilities. Returns to preferred stockholders support neither the wealth redistribution- hypothesis nor the price-pressure hypothesis.