In an earlier paper [2], the sequential decision process was applied to two major facets of credit management: (a) deriving unambiguous decision rules for handling individual credit requests; and (b) devising relevant credit indices for effective management control and evaluation of the system. Usefulness of the model was constrained by its static nature and by exogenous determination of other significant variables, notably, collection efforts and costs.

It is often desirable to know whether or not a risky asset's beta coefficient has changed and, if so, at what point in time the change occurred. For example, this knowledge is of obvious importance to beta-using security analysts and portfolio managers. As another example, a given theory may imply that a particular firm's beta should have changed at different points in time. Investigators may want to test such a hypothesis. Furthermore, tests are frequently performed on the effects of events on residuals of the market model, tests requiring the assumption of beta stability. For these, and possibly other reasons, it is useful to be able to detect that a change in beta did, in fact, take place as well as, in some instances, identifying the point in time at which the change took place.

Dileep R. Mehta, Edward A. Moses, Benoit Deschamps, Michael C. Walker, The Influence of Dividends, Growth, and Leverage on Share Prices in the Electric Utility Industry: An Econometric Study, The Journal of Financial and Quantitative Analysis, Vol. 15, No. 5 (Dec., 1980), pp. 1163-1196