The cost of doing business abroad and international capital market equilibrium

The implications of the costs of doing business in foreign countries for the resulting capital market equilibrium are studied. When transferring capital goods across national boundaries, the costs incurred are quasi-fixed in a one-good, two-country, intertemporal model with complete financial markets. In our model of the international capital market, deviations from purchasing power parity are endogenously generated. The relative price of physical resources located in one country compared to resources located in another is called the "real exchange rate." The outcome of the model-based analysis is an endogenous generation of a mean-reverting real exchange rate in a continuous-time, general equilibrium model of the international capital market. In dynamic equilibrium, the transfer of capital goods between the two countries is found to be infrequent and lumpy in nature as is observed in foreign direct investment.Capital market ; International finance ; Macroeconomics

Interest rate swaps and economic exposure

The interest rate swap market has grown rapidly. Since the inception of the swap market in 1981, the outstanding notional principal of interest rate swaps has reached a level of $12.81 trillion in 1995. Recent surveys indicate that interest rate swaps are the most commonly used interest rate derivative by nonfinancial firms and that nonfinancial firms are major users of interest rate swaps. In this paper, we provide an economic rationale for the use of interest rate swaps by such nonfinancial firms. In a global economy, given the floating exchange rate regime, nonfinancial firms face economic exposure in the presence of foreign competition. Asymmetric information about economic exposure leads to mispricing of the firms' debt, and the firm chooses either short-term or long-term debt to minimize the cost of debt. We show that when there is a favorable (unfavorable) exchange rate shock, an exposed firm chooses short-term (long-term) debt together with fixed-for-floating (floating-for-fixed) interest rate swaps. Given interest rate expectations, interest rate swaps enable the firm to minimize the cost of fixed or floating rate debt.Interest rates ; International finance ; Risk ; Swaps (Finance)

Managing the risk of loans with basis risk: sell, hedge, or do nothing?

Individual loans contain a bundle of risks including credit risk and interest rate risk. This paper focuses on the general issue of banks’ management of these various risks in a model with costly loan monitoring and convex taxes. The results suggest that if the hedge is not subject to basis risk, then hedging dominates a strategy of “do nothing.” Whether hedging dominates loan sales depends on whether it induces reduced monitoring, the net benefit of monitoring, and the reduced tax burden of eliminating all risk via selling. If the hedge is subject to basis risk, then a “do nothing” strategy may dominate the hedging and loan sales strategy for risk neutral banks. A number of empirical implications follow from the analytical and numerical results in the paper.Loan sales ; Hedging (Finance) ; Risk management

A Dynamic Equilibrium Model of Real Exchange Rates with General Transaction Costs

We study the behavior of real exchange rates in a two­country dynamic equilibrium model. In this model, consumers can only consume domestic goods but can invest costlessly in capital stocks of both countries. Nevertheless, transporting goods between the two countries is costly and, hence, the rebalancing of the capital stock can only happen finitely often. We propose a realistic cost structure for goods transportation, wherein the total cost increases with the amount of shipment but the unit cost decreases with it due to economies of scale. Given such a cost structure, the optimal decisions on when and how much to transfer need to be determined jointly. The dual decision depends upon the magnitude of economies of scale, the production technology specifications, and the consumer preferences. The model can reconcile the observed large short­term volatility of the real exchange rate with its slow convergence to parity. Further, the drift and diffusion of the real exchange rate are not uniquely determined by the real exchange rate level. The dynamics of the real exchange rate can only be determined by a joint analysis of the real exchange rate and the underlying economic fundamentals such as the capital stock imbalance between the two countries.costs of goods transportation; economies of scale; real exchange rate; purchasing power parity; nonlinearity.

Stereotyping of women in television advertisement

This study examined the portrayal of women in television commercials and documented the stereotypes associated with women in today’s television commercials. Content analysis was chosen as a method of inquiry for this study. Two hundred and twenty six advertisements were recorded from the three chosen networks, ABC, CBS and NBC. No local advertisements or public service announcements were included in the sample. Each advertisement was initially coded for the central figure, whether the central figure was a male or a female. In addition, each central figure in the advertisement was coded for the following categories: 1) age; 2) product use; 3) occupation; 4) voiceover; 5) product representative; 6) stance; and 7) product types. Analysis was performed to determine the extent to which female characters portrayed in these advertisements were subject to stereotypical portrayals. The analysis of the data gathered reveals that portrayals of women in television advertisements in many ways conform to most advertising’s stereotypical portrayals of women (as documented by previous researcher). However, the study provides evidence that the stereotypes associated with women is lessening. The study provides evidence of the emergence of a new trend in some cases toward portraying women and men as equals

An Empirical Investigation of Student Evaluations of Instruction - The Relative Importance of Factors

We analyzed over 100,000 student evaluations of instruction over four years in the college of business at a major public university. We found that the original instrument that was validated about 20 years ago is still valid, with factor analysis showing that the six underlying dimensions used in the instrument remained relatively intact. Also, we found that the relative importance of those six factors in the overall assessment of instruction changed over the past two decades, reflecting changes in the expectations of the current millennial generation of students. The results were consistent across four subgroups studied – Undergraduate Core, Undergraduate Non-Core, Graduate Core and Graduate Non-Core classes, with minor differences. Student Motivation (the instructor’s ability to motivate students) and grading/assignments (fairness and objectivity of grading practices) have superseded presentation ability in relative importance as indicators of overall teaching effectiveness. Our study has implications for teachers in terms of the appropriate areas to focus on for improving their teaching practices

Information Literacy and Information Seeking Behavior Among Business Majors

The current generation of college students has used the Internet to access information since the early 1990s. No assessment of information use, quality, variety, and reliability of information generally occurs at both the student and faculty level. In this paper we use a package of teaching methods targeted towards improving information-seeking behavior among graduate and undergraduate business majors. The effectiveness of the teaching package is assessed through an evaluation of student term-papers and quality of resources used. We find that the package of teaching methods implemented does result in significant improvement in information seeking behavior, especially among undergraduate business majors

Non-isomorphic solutions of some balanced incomplete block designs. I

AbstractIn this paper we develop a method for generating non-isomorphic solutions of balanced incomplete block designs belonging to the series of symmetric designs with parameters (4t+3, 2t+1, t) and to the series with parameters (4t+4, 8t+6, 4t+3, 2t+2, 2t+1). We also prove a result about the number of non-isomorphic solutions of these designs as the parameter t tends to infinity

The Problem of Supply of Coal for the New Steel Plants

WITH depletion of the lower ash, good coking coals occurring in the ripper seams of the Jharia coal field, which were the principal sources of supply of coking coals for the steel plants in the private sector, atte-ntion was focussed on the need for beneficiation of the higher ash Jharia coals. Three commercial coal washing plants (185 tons/hr. total capacity) were installed in recent years for supplying washed coal to the existing steel plants