The Marketing of Closed-End Fund IPOs

This study investigates a well-documented enigma in the finance literature, the aftermarket behavior of closed-end fund initial public offerings (IPOs). Many models with rational agents attribute the underpricing of industrial IPOs to information asymmetry between the IPO issues and the investing public. Since closed-end funds typically do not have pre-existing assets or proprietary rights, there is little information asymmetry about their asset valuation. Consequently, these models suggest that closed-end funds should exhibit less underpricing than industrial IPOs. However, information asymmetry theories cannot explain why closed-end funds are successfully brought to market overpriced. Specifically, closed-end funds are overpriced at issue relative to their net asset values (NAVs) due to substantial underwriting fees that average approximately 8% of total issue size. The study investigates these anomalies and describes regulatory and institutional mechanisms that contribute to the pattern of aftermarket returns. The authors perform an intraday analysis of aftermarket trades and quotes in the first 100 days of trading. They find that underwriting arrangements, identified during discussions with underwriters, help to explain not only the their primary observations, but also several unusual patterns in the transactions data. The authors show that the vast majority of volume in the first four weeks of trading is seller-initiated. Since short selling is not possible during this time period, the selling imbalance confirms the presence of flippers. However, these imbalances do not immediately translate into price declines. As the number of issues that are stabilized declines over time, the proportion of issues trading at unencumbered, market-determined prices increases. The authors also provide evidence that underwriters manage the cost of stabilizing by creating a net short position in the number of shares issued during the pre-market. Selling imbalance in the first few trading days has predictive power for the timing of subsequent price decline: the faster the short position is covered through stabilizing purchases, the sooner the price drops. Funds that exercise the over-allotment option experience longer stabilization periods. The authors document that seller-initiated trades are both larger and more profitable than buyer-initiated trades in the after market period. Small investors who buy shares in the aftermarket engage in open market transactions that they believe are at unencumbered prices. The authors believe that their findings support a marketing hypothesis for closed-end fund IPOs. To protect their reputation and improve the likelihood of a successful offer, lead underwriters promise to stabilize prices in the aftermarket, essentially granting free put options with a strike price equal to the offer price. The stabilization bid provides the opportunity for some syndicate members to sell large blocks to flippers during the pre-issue period. The number and size of sell orders in the first few days of trading show that a sizable number of these traders exercise this options and flip their shares back to the syndicate. The size of the trades suggest that they are small, retail customers. The legality of this scenario appears to be within the guidelines of current securities regulation The authors speculate that flippers are wiling to participate because of other inducements they receive through their ongoing relationships with underwriters. On the cost side, underwriters may incur significant costs from flipping and protracted stabilization. However, the cost of stabilization may well be offset by the benefits of assuring a successful initial distribution. Small investors face substantial information processing costs and may be highly susceptible to "marketing" tactics. The authors believe their findings raise questions about the adequacy of current disclosure rules for IPOs, and the propriety of securities regulation that permit short term stabilization in closed-end fund IPO aftermarkets. They also suggest that similar patterns of selling pressure, price stabilization, and asymmetric behavior between large and small trades may be found in two other securities - master limited partnerships and real estate investment trusts.

The Value of Liquidity

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/72848/1/1080-8620.00026.pd

Strength Training Improves Body Image and Physical Activity Behaviors Among Midlife and Older Rural Women

The effect of strength training on body image is understudied. The Strong Women Program, a 10-week, twice weekly strength-training program, was provided by Extension agents to 341 older rural women (62±12 years); changes in body image and other psychosocial variables were evaluated. Paired-sample t-test analyses were conducted to assess mean differences pre- to post-program. Strength training was associated with significant improvements in several dimensions of body image, health-related quality of life, and physical activity behaviors, satisfaction, and comfort among rural aging women—an often underserved population that stands to benefit considerably from similar programs

Cholesterol Synthesis and Nerve Regeneration

In this report, we examine the requirement of cholesterol biosynthesis and its axonal transport for goldfish optic nerve regeneration. Cholesterol, labeled by intraocular injection of [ 3 H]mevalonolactone. exhibited a delayed appearance in the optic tectum. Squalene and other minor components were labeled but not transported. Following optic nerve crush, the amount of labeled cholesterol transport was elevated, while retinal labeling was not altered relative to control fish. A requirement for cholesterol biosynthesis is inferred from the inhibition of neurite outgrowth in retinal explants caused by the cholesterol synthesis inhibitor, 20, 25-diazacholes-terol. The inhibition of growth could be overcome by addition of mevalonolactone, but not cholesterol, to the medium. Intraperitoneal administration of 200 nmol of dia-zacholesterol resulted in 92-98% inhibition of retinal cholesterol synthesis and accumulation of labeled des-mosterol and other lipids in fish retina and brain which persisted for 2 weeks. Diazacholesterol-treated fish showed no reduction in the amount of lipid-soluble radioactivity transported following intraocular injection of [ 3 H]mevalonolactone, but there were alterations in the chromatographic pattern of the transported labeled lipids. In contrast to its effects on neurite outgrowth in vitro , diazacholesterol did not inhibit optic nerve regeneration in vivo , as measured both by arrival of labeled rapidly transported protein at the tectum and by time required for the return of visual function.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/65710/1/j.1471-4159.1984.tb12701.x.pd

Debt, Agency, and Management Contracts in REITs: The External Advisor Puzzle

This study investigates why externally advised real estate investment trusts (REITs) underperform their internally managed counterparts. Consistent with previous studies, we find that REITs managed by external advisors underperform internally managed ones by over 7 percent per year. Property-level cash-flow yields are similar between the two managerial forms, but corporate-level expenses and especially interest expenses are responsible for lower levels of cash available to shareholders in externally advised REITs. We document that the higher-interest expenses are due to both higher levels of debt and to higher debt yields for externally advised REITs. We posit that compensating managers based on either assets under management or on property-level cash flows creates incentives for managers to increase the asset base by issuing debt even if the interest costs are unfavorable.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/47758/1/11146_2004_Article_254942.pd

Heteroskedasticity in Stock Returns

We use predictions of aggregate stock return variances from daily data to estimate time varying monthly variances for size-ranked portfolios. We propose and estimate a single factor model of heteroskedasticity for portfolio returns. This model implies time-varying betas. Implications of heteroskedasticity and time-varying betas for tests of the capital asset pricing model (CAPM) are then documented. Accounting for heteroskedasticity increases the evidence that risk-adjusted returns are related to firm size. We also estimate a constant correlation model. Portfolio volatilities predicted by this model are similar to those predicted by more complex multivariate generalized-autoregressive- conditional- heteroskedasticity (GARCH) procedures.

Price stabilization in the market for new issues

This study examines price stabilization in new equity issues. Stabilizationtruncates the distribution of post-issue prices at a floor price, lowering the risk of adverse price moves and hence, in a competitive dealer market, reducing the bid-ask spread. Using 1.523 NASDAO-traded firm- commitment initial public offerings issued between 1982 and 1987, we find that spreads narrow when the market price is close to the offer price and stabilization is most likely. Moreover, significant negative returns are documented after the hypothesized termination of stabilizing activities, suggesting that stabilization, and its cessation, affect market prices.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/30539/1/0000172.pd

Immune response and growth of Lates calcarifer fed on hydrolized protein-supplemented diet

ABSTRACT This experiment was aimed to investigate the effects of protein hydrolysates on growth performance and immune response of the Asian sea bass Lates calcarifer Bloch. The experiment was performed in two different rearing period, namely nursery and grow out by using completely randomized design. Experimental fish were fed with three types of diets and each treatment was repeated three times: a local commercial diet (control), coated or not, with 2%, and 3% of protein hydrolysates. Challenge test was performed with Vibrio parahaemolyticus at a density of 105 sel/mL by using immersion method. The results showed that the the neutrofil, leukocyte and monocyte of the fish fed on protein hydrolisates were significantly higher than those non-supplemented group (P<0.05). Meanwhile, the lymphocyte on the fish treated with hydrolisates showed no difference amongst treatments (P<0.05). The growth performance of Asian sea bass fed on protein hydrolisates significantly improved the total fish weight (g), relative weight gain, specific growth rate, final weight (g) and final length (cm) in comparison to the control (P<0.05) both at nursery and grow out phase. Higher survival both at the nursery and grow out phase were obtained by the group fed with 3% protein hydrolisates: 97.28±0.18% and 86.0±4.32%. Followed with 2% supplementation level 96.75±0.28% and 78.4±7.7%. The lowest survival was shown by the control group with 93.65±0.13% and 20.1±21.1% from nursery and grow-out phase respectively. Results of challenged test showed that the protein hydrolisates supplementation was able to improve the post-challenged survival and resistency of Asian sea bass against V. parahaemolyticus infection. Fish treated with 3% protein hydrolisates generated higher survival 78,33±2,89%, followed by treatment 2% 73,33±5,77%, and control 31,67±7,64% after five days post immersion (P<0.05). Keywords: Asian sea bass, protein hydrolisates, growth, immune system   ABSTRAK Penelitian ini bertujuan untuk menguji efektivitas suplementasi protein hidrolisis pada pakan terhadap respons kekebalan tubuh dan performa pertumbuhan ikan kakap putih Lates calcarifer. Penelitian dilakukan di dua fase pemeliharaan, yakni fase pendederan dan pembesaran dengan menggunakan rancangan acak lengkap. Penelitian ini menggunakan tiga perlakuan dan masing–masing perlakuan memiliki tiga ulangan, dengan deskripsi perlakuan adalah kontrol, aplikasi 3% dan 2% protein hidrolisis. Uji tantang dilakukan dengan menggunakan Vibrio parahaemolyticus pada konsentrasi 105 sel/mL dengan metode perendaman. Hasil analisa respons kekebalan tubuh menunjukkan bahwa neutrofil, leukosit, dan monosit pada kelompok ikan yang mendapatkan aplikasi protein hidrolisis meningkat secara nyata dibandingkan kontrol (P<0,05). Sementara limfosit pada kelompok perlakuan protein hidrolisis tidak memiliki perbedaan yang nyata dibandingkan kontrol (P<0,05). Performa pertumbuhan ikan kakap putih yang mendapatkan suplementasi protein hidrolisis juga memiliki total bobot (g), % bobot relatif, % laju pertumbuhan spesifik, bobot akhir (g) dan panjang akhir (cm) yang secara nyata lebih baik jika dibandingkan dengan kontrol (P<0,05) baik pada masa pemeliharaan di pendederan maupun di pembesaran. Sintasan paling tinggi pada fase pendederan dan pembesaran terdapat pada kelompok suplementasi 3% dengan 97,28±0,18% dan 86,0±4,3%. Diikuti oleh kelompok 2% dengan 96,75±0,28% dan 78,4±7,7%; dan paling rendah diperoleh pada kelompok kontrol dengan 93,65±0,13 % dan 20,1±21,1% masing-masing dari fase pembenihan dan pembesaran. Hasil uji tantang menunjukkan bahwa suplementasi protein hidrolisis mampu meningkatkan sintasan dan meningkatkan resistensi ikan uji terhadap infeksi V. parahaemolyticus. Pemberian protein hidrolisis dengan konsentrasi 3% merupakan dosis terbaik dengan sintasan 78,33±2,89%, diikuti oleh aplikasi 2% dengan 73,33±5,77% dan kontrol dengan 31,67±7,64% setelah lima hari masa uji tantang (P<0,05). Kata kunci: ikan kakap putih, protein hidrolisis, pertumbuhan, sistem kekebalan tubuh

Numerical simulations of wave breaking

This paper is devoted to the numerical simulation of wave breaking. It presents the results of a numerical workshop that was held during the conference LOMA04. The objective is to compare several mathematical models (compressible or incompressible) and associated numerical methods to compute the flow field during a wave breaking over a reef. The methods will also be compared with experiments