Despite the proliferation of banking services, the basic commercial and industrial lending process remains the lifeblood of commercial banks and other banking institutions. The lending process is a relatively straightforward series of activities involving two principal parties whose association ranges from the initial loan request to the successful or unsuccessful repayment of the loan. Most students of banking would agree that the process is an interdependent one, but the exact dependencies are rarely articulated in a rigorous manner. One of the purposes of this paper is to investigate the association between at least two important aspects of the lending process, namely, the credit evaluation stage and the sequence of events that describes and quantifies the charge-off and subsequent recovery experience.

Among the many financial problems facing managers of firms, capital budgeting problems are often the most important. Over the years these problems have received considerable attention from financial economists with more recent work emphasizing two separate approaches. One currently popular approach to capital budgeting is based on the simple linear relationship between risk and return from the intertemporal capital asset pricing model (CAPM) of Merton [20]. Papers in this category include Brennan [7], Bogue and Roll [4], Treynor and Black [26], Myers and Turnbull [21], Fama [15], Bhattacharya [2], and Constantinides [9].

There has been a long-standing doctrine that high levels of employment tend to be accompanied by inflation. Closely related is the view that unemployment or slack economic conditions in general can be relieved by increases in the supply of money. These views have been held by economists of widely varying persuasions and particularly with widely varying views on appropriate economic policy. During the postwar period, the concept of a trade-off between inflation and unemployment was studied empirically and also used an extension of the basic Keynesian framework of analysis (a needed supplement since the General Theory had little to say about price movements in the absence of full employment).

A currency is not risky because devaluation is highly likely. If the devaluation were certain, there would be no risk at all. A weak currency can be less risky than a strong currency. A strong currency does not become risky because it has been used to denominate a firm's debt.

In placing a new security issue, an investment banker has an opportunity to obtain private information by conducting preselling activities during the registration period. The task of the issuer is to design a contract that both induces the banker to use this information to the issuer's advantage and provides a disincentive for the banker to price the issue too low in order to reduce the effort required to sell the issue. This paper characterizes the class of price response functions that the issuer can induce the banker to choose under a delegation scheme and demonstrates that delegating the pricing decision to the banker can be optimal.

Managerial aversion to reduce dividends is not only an assertion to be found in the financial literature (see, for example, [2], [4], [8], [9]), but is also the basis for the informational content of dividends hypothesis (see [8]). Furthermore, its existence, if known to investors, can explain dividend payments which involve tax and transaction related costs. Surprisingly, the empirical evidence on this assertion is less than satisfactory. This study examines the existing empirical evidence on this assertion and points out its limitations. A new test, that can refute the informational content associated with the reluctance to cut dividends, is then performed.

The concerted actions of giant companies operating on the international stage, notably in mining and petroleum, rival the Schleswig-Holstein question in complexity. In the absence of any clear understanding of the reasons for huge mergers such as that which took place in the southern African copper mining industry at the depth of the Great Depression, rationalizations that reflect Marxist-Leninist simplism and populist paranoia have been popular. Messrs. Alford and Harvey undertake to unravel the reasons for the copper merger, concluding that this merger defies modern, formal merger theory and teaches that there is no substitute for a close study of the motives of “corporate insiders.”