Credit ratings, Municipal bonds, Financial reporting, Monitoring

Financial accounting, Welfare, Public information, Exchange economies

Much of modern portfolio theory rests on conclusions drawn from the original form of the Capital Asset Pricing Model. Fundamental to the conclusions of this model is the assumption of perfect competition among investors; i.e., all investors possess approximately the same small amount of wealth such that equilibrium price cannot be influenced significantly by the demand of any of the investors. Today's security market, however, is characterized by individuals and large institutional investors such as insurance companies and investment funds. Although institutions represent a very small fraction of all investors in the market, institutional investors in 1977 held 34.3 percent of all outstanding stock. By the very magnitude of the dollar transactions effected by these large investors, prices can and are affected dramatically. Because today's security market is composed of investors exhibiting extreme differences in wealth, the United States securities market probably is not perfectly competitive as assumed in portfolio theory. Consequently, investment theory must be extended to reflect vast wealth differences among investors. To achieve this end, modifications are made to the original Capital Asset Pricing Model. Equilibrium conditions are examined and conclusions are drawn as to how portfolio theory must be altered to include price affecting ability by a segment of the investors in the market.

The objective of this study is to determine the impact of money market conditions and a bank's regulatory environment on the interest rates banks charge on their loans. This is accomplished through the analysis of the effect of these impacts, in a multiperiod framework, on a bank's optimal investment and borrowing decisions and the minimum required rate of return on its asset portfolio.

Journal Article A Combinatorial Analysis of the Overlapping Generations Model Get access Stephen A. Clark Stephen A. Clark University of Kentucky Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 48, Issue 1, January 1981, Pages 139–145, https://doi.org/10.2307/2297126 Published: 01 January 1981 Article history Received: 01 July 1979 Accepted: 01 May 1980 Published: 01 January 1981

James M. Patell, Mark A. Wolfson, The Ex Ante and Ex Post Price Effects of Quarterly Earnings Announcements Reflected in Option and Stock Prices, Journal of Accounting Research, Vol. 19, No. 2 (Autumn, 1981), pp. 434-458

Mark A. Satterthwaite, Hugo Sonnenschein; Strategy-Proof Allocation Mechanisms at Differentiable Points, The Review of Economic Studies, Volume 48, Issue 4

Journal Article Justice to the Australians Get access Paul A. Samuelson Paul A. Samuelson Massachusetts Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 96, Issue 1, February 1981, Pages 169–170, https://doi.org/10.2307/2936147 Published: 01 February 1981