In a recent article, Donald R. Hodgman set forth a framework for analyzing commercial bank lending behavior which emphasized the relationship of customers to their banks as both depositors and borrowers. Specifically, Hodgman links the borrower's contract rate of interest to the profitability of his deposit account, i.e., banks compete for profitable deposit customers by offering the customer a rate which is lower than the comparable open market rate (adjusted for risk). Hodgman uses the terms deposit relationship and customer relationship to describe this behavior. He argues that compensating balance requirements, the prime rate convention, and provision of services below cost may be viewed as a systematic, rational attempt by commercial banks to maximize long-run profit under existing institutional arrangements when viewed from the perspective of the customer relationship.

I. Introduction, 140. — II. Application, 142. — III. Conclusion, 145.

I. Financial intermediary investment behavior, 494. — II. Long-run trends and structural shifts in the postwar mortgage market, 500. — III. Financial intermediary mortgage investment behavior, 503. — IV. Conclusions, 513.

A theoretical model capable of supporting a rigorous analysis of portfolio selection in financial intermediaries appeared only recently. In the absence of a suitable theoretical framework, the limitations of maximizing behavior as an explanation of the selection of asset and liability structures in this class of firms were obscured. Discussions bearing on this question usually focused on the structure of one or the other side of intermediary balance sheets and gave little attention to the effects of these structures on the risk associated with their equity.

The substantial growth of the mutual fund industry during the last few years has attracted the attention of students of finance, economics, and public policy alike. Net assets managed by such funds have grown from approximately $450 million in 1940 to more than $38 billion by June of 1966. During 1965 the mutual fund industry funneled some $5. billion of new (primarily equity) funds into the capital markets; more than twice the $2. billion in new equity raised by all non-financial United States corporations during the year. Growth of the industry has not been uniform, however, but has been concentrated among a relatively small number of highly successful funds.

I. The invention, 475. — II. The innovation: domestic lag, 475. — III. The innovation: international lag, 476. — IV. Explanation of the lag, 478. — V. Conclusion, 481.

Reviews the book "The Financial Manager: Basic Aspects of Financial Administration," by Jerome B. Cohen and Sidney M. Robbins.

The article presents surveys that have been conducted in the past to find out what texts were used in the U.S. business schools for accounting. One survey seemed to evoke considerable interest among faculty members as evidenced by requests for copies of results, so the information was made available to all who asked for it and the results were summarized and published in the July 1963 issue of the journal "The Accounting Review." A similar survey was made in 1964 issue, but was omitted in 1963 and 1966. This year, another questionnaire was mailed to the chairman or head of the accounting department of all AACSB member schools. The 1966-67 Directory of Members of the AACSB lists 120 schools as members. Questionnaires were returned from 105 of the 120 schools, or 87.5%. Information received from the questionnaire is presented in the following summaries. Texts used in five or more AACSB schools in each curriculum area are identified. If the number of schools using a particular text was less than five, they are included under the "various" category.