Prepared in association with the Sloan School of Management and the Dept. of Economics

Richard A. Shick, James S. Trieschmann, Some Further Evidence on the Performance of Property-Liability Insurance Companies' Stock Portfolios, The Journal of Financial and Quantitative Analysis, Vol. 13, No. 1 (Mar., 1978), pp. 157-166

Journal Article On the Efficiency of a Competitive Monetary Equilibrium with Transaction Costs Get access Seppo Honkapohja Seppo Honkapohja Yrjö Jahnsson Foundation and University of Helsinki Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 3, October 1978, Pages 405–415, https://doi.org/10.2307/2297243 Published: 01 October 1978 Article history Received: 01 February 1976 Accepted: 01 May 1977 Published: 01 October 1978

Abstract ABSTRACT: The role of accounting data in the formation of security prices in general, and the process by which such prices adjust to the announcement of external accounting numbers in particular, has attracted considerable attention. Extending the research conducted by Ball and Brown, this paper examines the degree to which earnings yields of corporate equities affect the association between annual income numbers and security prices. The propositions of two alternative views on this association are analyzed in the context of a normative model of investor expectations and security price behavior. The empirical evidence reported in this paper leads to the conclusion that, by and large, the level of association between annual income numbers and security prices is not independent of the earnings yields of common stocks. This finding indicates that either there exists frictions in the security price adjustment process or the extant two-parameter model of market equilibrium is mis-specified. Finally, some important implications of these results for capital market researchers, as well as for investors are provided.

We present sufficient conditions for taxable investors to be indifferent to dividends despite tax differentials in favor of capital gains (Strong Invariance Proposition). The conditions include two ‘seemingly unrelated’ provisions of the Internal Revenue Code: (1) the limitation of interest deductions to investment income received and (2) the tax-free accumulation of wealth at the before-tax interest rate on investments in life insurance. Although we use insurance for simplicity in the proof, many tax-equivalent investment vehicles now exist, notably pension funds. Our analysis suggests that the personal income tax is approaching a consumption tax with further drift likely.

Kenneth S. Lorek, James C. McKeown, The Effect on Predictive Ability of Reducing the Number of Observations on a Time-Series Analysis of Quarterly Earnings Data, Journal of Accounting Research, Vol. 16, No. 1 (Spring, 1978), pp. 204-214

Abstract ABSTRACT: This article provides a rigorous development of a contract (or commitment) basis of accounting as an alternative to the exchange basis in present use. Specifically, the analysis deals with the valuation of executory contracts including purchase commitments, forward contracts in foreign exchange, employee stock options, and leases. Notwithstanding the severity of assumptions, the analysis provides a coherent, logical, and widely applicable model of valuation in accounting.

Abstract This study evaluates the effectiveness of conventional and self-paced instruction and locus of control theory on student achievement, Three null hypotheses were tested: there are no significant differences on the basis of (1) method of instruction, (2) locus of control, and (3) their interaction. For one semester, 120 introductory accounting students were taught using either conventional or self-paced instruction. At the completion of the semester, and achievement test was administered. Results indicated that hypothesis (1) was not supported. Students taught using the conventional method significantly outperformed students taught using the self-paced method. Hypotheses (2) and (3) were accepted.