This study tests the effect of homework collection and quizzes on exam scores. Expectancy theory as modified by Porter and Lawler [1968] suggests that performance (a student's exam score) is dependent upon effort, abilities and traits, and role perception (regarding the class). An accounting instructor is able to influence a student's effort through assigning different tasks (teaching techniques) which may include homework collection or quizzes. In this study, a Latin square design allows several teaching techniques to be tested in four accounting classes and controls for possible bias in exam scores resulting from time of class and exam difficulty. Additionally, GPA is used as a covariate. The results indicate that the selected teaching techniques do not significantly affect exam scores.
Previous market-based research has generally failed to detect significantly negative market price reaction to the issuance of SFAS No. 8. Using standardized abnormal returns, this study re-examines the issue. Reaction to events culminating in the issuance of SFAS No. 52 is also studied. Finally, since the accounting method used prior to SFAS No. 8 may be related to the costs imposed by SFAS No. 8, the method is determined and its effect on the observed market reactions is investigated. Our results indicate an overall negative reaction to SFAS No. 8, with a positive reaction to SFAS No. 52. In addition, the pre-SFAS No. 8 method of accounting for foreign currency translation is found to be related to the market reactions to SFAS No. 8 and SFAS No. 52 in mixed and unpredictable ways.
Despite the fact that the most theoretical analyses (with the notable exception of the Ricardian equivalence approach) indicate that increased deficits cause interest rates to rise, the empirical evidence is at best inconclusive.1 In this note the relationship between interest rates and deficits is examined with the announcement effect methodology which has not previously been used in this context. We find evidence of a positive relationship between unanticipated announcements of the projected Federal government deficit and interest rates. In an efficient market, information about any determinant of interest rates should be quickly incorporated into observed rates. Thus, when information about the size of the deficits is released, a relatively quick impact on interest rates can be anticipated. More specifically, if an increase in the deficit is, in fact, associated with higher interest rates, then an unanticipated announcement of a larger deficit should lead to a response in financial markets, which increases interest rates. This paper provides evidence on the announcement effects of information on the deficit. The advantage of the announcement effect approach is that it precludes the necessity of specifying a structural model for interest rates.2 Projections of current and future Federal government deficits are made on a regular basis by both the Office of Managementand Budget (OMB) and the Congressional Budget Office (CBO), and receive wide attention in the financial press. These projections provide data that are related to the change in interest rate on government securities from the day before the announcement to the end of the announcement day. The macroeconomic hypothesis underlying this investigation is simply that an increase in the current or future deficit leads to an increase in yields on government securities in anticipation of higher levels of debt financing. In a rational expectations framework, an announcement of higher future deficits will lead to a current increase in interest rates in anticipation of future financing. Thus, the examination of announcement effects enables us to substantiate a relationship between interest rates and deficits without encountering the econometric problems of reduced form modeling. Section I begins with a description of the data. This is followed by a discussion of the methodology in Section II. Section III presents the empirical results. This is followed by our conclusions in Section IV.
John H. Kagel, Ronald M. Harstad, Dan Levin, Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study, Econometrica, Vol. 55, No. 6 (Nov., 1987), pp. 1275-1304
Financial classification issues, and particularly the financial distress problem, continue to be subject to vigorous investigation. The corporate credit granting process has not received as much attention in the literature. This paper examines the relative effectiveness of parametric, nonparametric and judgemental classification procedures on a sample of corporate credit data. The judgemental model is based on the Analytic Hierarchy Process. Evidence indicates that (nonparametric) recursive partitioning methods provide greater information than simultaneous partitioning procedures. The judgemental model is found to perform as well as statistical models. A complementary relationship is proposed between the statistical and the judgemental models as an effective paradigm for granting credit.