Where virtuoso talents were required by the courts, great and small, of seventeenth- and eighteenth-century Europe, the protectionist system of guilds was suspended, according to Dr. Stürmer. In a society where status had to be attested to by conspicuous consumption, of which the sovereign himself was the most avid practitioner, the finest artisans in the fields of interior decoration and furnishings often attained the status of “court artisans,” in which they enjoyed many of the freedoms of laissez-faire that members of the guilds denied themselves as well as their competitors. In the end, however, the Revolution that swept away the guild economy also destroyed this expedient whereby excellence and entrepreneurship had been fostered.

In a recent article Fabozzi and Francis [3] presented the results of empirical tests designed to determine if the regression coefficients of the single-index market model were significantly different in bull and bear markets. Using three alternative definitions of bull and bear markets, Fabozzi and Francis (FF) concluded the coefficients of the single-index market model were not significantly different in the two types of markets.

In the June 1978 issue of this Journal, Herbst [2, p. 363] cautioned the reader to beware of a unique, real internal rate of return (IRR) because such a return is “an incorrect measure of the return on investment” for a mixed project. While it is true, as discussed by Teichroew, Robichek and Montalbano (TRM) [4], and now by Herbst, that a mixed project may have a unique IRR, several additional observations developed by TRM should be added to Herbst's discussion. These comments will clarify the implications of Herbst's paper for a decision maker who has a mixed project with a unique real IRR.

Among the factors that have assured the success of units of “multinational” firms like the International Telephone and Telegraph Company, according to Professor Little, is the willingness of the parent's home government to use its diplomatic strengths to assure that a host government lives up to its contractual obligations, even after radical changes in its leadership. Using diplomatic correspondence of the United States with ITT and the Spanish Republic of the 1930s, he demonstrates the vital nature of these strengths at a time when the tensions between “communism” and “fascism” were new and vigorous, and reaches a startling conclusion about the sameness under the skin of the two ideologies where the rights of foreign concessionaries are concerned.

There is strong theoretical support for the notion that prices in a perfect capital market will vary randomly ([22], [16]). However, the existence of some nonrandomness in stock prices is well documented, see ([10], [11], [13], [14], [20]). Of special importance for this study is the research by Young [24] who finds predominantly negative autocorrelation for a sample of securities using a monthly differencing interval. Autocorrelation coefficients are often used as a measure of nonrandom price behavior; negative autocorrelation is an indication of price reversals.

As is generally known, the 1790s was the first decade in which the American banking system expanded. Professor Klebaner has taken the trouble to ascertain the fate of the state-chartered banks founded in that decade. He has put his material into lists that we are glad to publish as a unique source of banking history.

Of the many conglomerate studies to date, some have dealt with the risk-return performance of conglomerates in the context of the capital asset pricing model [2,7,10,14], others have considered the motives for the formation of conglomerates [4,5,6,13], and still others have examined the operating characteristics of conglomerates [9,12,15]. Within the last group, Weston and Mansinghka [15, p. 928] argued that the primary motivation for conglomerate formation is defensive diversification, “…defined as diversification to avoid adverse effects on profitability from developments taking place in the firm's traditional product market areas.” Another motivation is provided by Levy and Sarnat [4] and Lewellen [5] who demonstrated that the only economic gain from a purely conglomerate merger may be the increased debt capacity resulting from the combination of entities having imperfectly correlated earnings streams.

In an important article in 1971, Fisher and Weil [4] demonstrated that it is possible to immunize a portfolio of default-free coupon bonds against unexpected interest rate changes so that at the end of the planning period the investor will realize at least the return expected at purchase. Immunization may be achieved by constructing a portfolio whose average duration is equal to the length of the investor's planning period. The computation of duration that produces immunization is dependent on the nature of the assumed stochastic interest rate shocks. Fisher and Weil derive the duration that will produce immunization for additive shifts in the yield curve under instantaneous compounding, e.g., g(t) + λ where g(t) is the instantaneous interest rate at time t and λ is a random shift parameter.

The relationship between the rate of inflation and the interest rate has been a topic of research for quite some time. A breakthrough in the analysis occurred years ago with Irving Fisher's hypothesis that the nominal interest rate fully reflects the available information concerning the possible future values of the rate of inflation. Others have extended Fisher's original insight to explain further the interaction between the rate of interest and inflation. For example, Mundell [26] uses the Pigou real-balance effect to hypothesize that the real rate of interest is inversely related to the rate of inflation.