A series of empirically refutable generalized two parameter asset pricing models that linearly relate risk and return are identified for the power (and quadratic) utility members of the linear risk tolerance capital asset pricing models. Five possible power utility models and the mean variance model are tested to determine whether one model might provide a more accurate description of security pricing. The major empirical result is that the data do not allow us to distinguish between the models.

The commercial banking industry has been buffeted by a variety of forces in recent years. Alternating periods of intense monetary restraint and the severity of the 1973–74 economic contraction (especially as it affected the real estate industry), huge losses on loan portfolios, a heavy commitment of funds to less developed countries on the part of a few major banks, and the failures of a number of individual banks have created considerable discussion about the stability of the banking system. Questions have been raised about the risk involved in committing funds to the securities of banking organizations. Moreover, the importance of these questions has been underscored for bank management by the necessity for many banking organizations to raise substantial amounts of external funds to prevent further depletion of existing capital ratios.

Recently, the appropriateness of the weighted average cost of capital for making decisions on capital structure and the selection of projects has been seriously questioned. Arditti [1] showed that when project lives were finite, the weighted average cost of capital was not appropriate for valuing the firm. Beranek [2] demonstrates that when the objective is shareholder wealth maximization, the appropriate discount rate for capital budgeting decisions for finite lived projects n > 1 is not the traditional weighted average cost of capital.

According to a now classic study of stock market price behavior by Fama [6], the empirical distributions of daily log price relatives are usually stable Paretian, non-Gaussian. However, there appears to have been substantial reluctance to accept Fama's [6] research results as indicative of a fundamental return generating process which is stable Paretian, non-Gaussian. Blattberg and Gonedes [1], Clarke [4], Officer [18], Praetz [19], and Press [20] have each in their own way questioned the Fama [6] results. Most recently Hsu, Miller, and Wichern (HMW) [13] have suggested that in periods of homogeneous activity for a firm the empirical distribution of rates of return on a common share may be Gaussian, in other words, that the fundamental return generating process may be normal.

Journal Article Optimal Depletion of an Exhaustible Resource with Research and Development towards an Alternative Technology Get access R. Davison R. Davison Cranfield Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 2, June 1978, Pages 355–367, https://doi.org/10.2307/2297350 Published: 01 June 1978 Article history Received: 01 July 1976 Accepted: 01 March 1977 Published: 01 June 1978

Journal Article Ex-Post Efficiency and Resource Allocation Under Uncertainty Get access Richard Harris Richard Harris Queen's University, Kingston Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 3, October 1978, Pages 427–436, https://doi.org/10.2307/2297245 Published: 01 October 1978 Article history Received: 01 July 1976 Accepted: 01 November 1977 Published: 01 October 1978

William R. Russell, Tae Kun Seo; Ordering Uncertain Prospects: The Multivariate Utility Functions Case, The Review of Economic Studies, Volume 45, Issue 3,