Knowledge that Transforms

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In an article published earlier in this journal [4], we studied the term structure of interest fates in a dynamic context. Instead of focusing on the yield curve at a point in time, we investigated the joint movement of short and long-term interest rates through time. We compared the cyclical behavior of the ninety-day Treasury bill rate and the ten-year U.S. government bond rate by using cross-spectral analysis. The data used for the analysis were obtained from regression-fitted yield curves. These fitted yield curves enabled us to obtain the monthly yields of securities of prespecified term to maturity. The derivation was done in a precise manner which at the same time is in line with most of the previous term structure studies.

A recent article in this journal [1] described a model for the computation of taxadjusted true yields to maturity on discount bonds and explained the use of a computer routine implementing this model. Unfortunately, the translation of the computer program into equation form contained a number of notational errors. In addition, there was an equals sign missing from the third equation [1, page 267]. As a result, the reader, in attempting to implement the model as it was formulated in the original article, will probably fail.

George Kaufman and Cynthia Latta in “The Demand for Money: Preliminary Evidence from Industrial Countries, ” have presented econometric evidence that the money-demand function may shift with the development of financial markets. The thesis depends on the heightened cross-elasticities and lowered wealth-elasticities (or income-elasticities) that are supposed to attend the development of new near-money forms. Their evidence is based on a summary of statistics from money-demand equations for developed and less-developed countries.

This article has described a technique for evaluating intercorporate performance using risk, return, and trend. By regressing risk and trend on return for a large number of companies, an average performance plane has been established. A company's performance is measured by determining its position relative to the plane.

An abstract is not available for this content so a preview has been provided. As you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

An abstract is not available for this content so a preview has been provided. As you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

An abstract is not available for this content so a preview has been provided. As you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

In a recent note in this journal, Professor Levy discussed the relative merits of the payback method and the discounted rate-of-return (IRR) method. In examining the relationship between K (IRR) and Kp (the reciprocal of the payback), he reaffirmed that the two were approximately equal based on the assumption that:(1) annual earnings were the same every year, and(2) , where N is the life of the asset.