Publications

March 1987 (Revised June 1991)
Case

Understanding the U.S. Dollar in 1987

By: W. Carl Kester and Richard P. Melnick

Keywords: Currency; United States

March 1987 (Revised July 1996)
Case

Kansas City Zephyrs Baseball Club, Inc.

By: Kenneth A. Merchant, Krishna G. Palepu and Joseph P. Mulloy

Describes a dispute between the owners of the major league baseball teams and the players' union about the profitability of the baseball teams. The issue is important because of the ongoing collective bargaining negotiations. A consultant is brought in to decide... View Details

Keywords: State Ownership; Compensation and Benefits; Entrepreneurship; For-Profit Firms; Accounting; Activity Based Costing and Management; Resource Allocation; Cost Accounting; Cost Management; Labor and Management Relations; Financial Management; Sports; Sports Industry; Kansas

March 1987
Article

Using Survey Data to Test Standard Propositions Regarding Exchange Rate Expectations

By: J. Frankel and K. A. Froot

Keywords: Currencies; Exchange Rates; Asset Pricing; International Macroeconomics; Monetary Policy; Currency Controls; Fixed Exchange Rates; Floating Exchange Rates; Currency Bands; Currency Zones; Currency Areas; Rational Expectations; Analytics and Data Science; Finance

February 1987 (Revised September 1991)
Background Note

Foreign Exchange Market, Background Note and Problem Set, The

By: W. Carl Kester and Richard P. Melnick

Discusses the background of the foreign exchange market. This includes information about the participants and how the market operates. The problem set verses students in the arithmetic in the many common foreign exchange problems such as calculating forward premium and... View Details

Keywords: Financial Markets

February 1987 (Revised March 2006)
Case

Arley Merchandise Corporation

By: William E. Fruhan Jr.

Involves the initial public offering of a firm's stock. The offering includes a money-back guarantee to investors from the issuing firm which comes in the form of a "put" option. Option valuation is thus an important issue in this case. View Details

Keywords: Initial Public Offering; Stocks; Cases; Valuation; Stock Options; Apparel and Accessories Industry; Service Industry

February 1987 (Revised February 2000)
Case

Polysar Limited

By: Robert L. Simons

Canada's largest chemical company produces and markets butyl rubber in two divisions, each treated as a profit center. The new plant in the North American Division operates below capacity resulting in a significant volume variance and an operating loss. The European... View Details

Keywords: Loss; Profit; Financial Management; Volume; Performance Capacity; Financial Statements; For-Profit Firms; Market Participation; Chemical Industry; Rubber Industry; Canada

January 1987 (Revised January 1988)
Background Note

Note on Trade Finance

By: David B. Yoffie

January 1987 (Revised September 1991)
Case

Walt Disney Co.'s Yen Financing

By: W. Carl Kester and William B. Allen

Walt Disney is considering hedging future yen inflows from Disney Tokyo. It is evaluating techniques using FX Forwards, swaps, and Yen term borrowings. Goldman Sachs presents a rather unusual but potentially attractive solution: Disney could issue ECU Eurobonds and... View Details

Keywords: Borrowing and Debt; Currency; Bonds; Valuation; Tokyo

January 1987 (Revised November 1991)
Case

R.J. Reynolds International Financing

By: W. Carl Kester and William B. Allen

Reynolds must source a substantial portion of the financing of its Nabisco acquisition in offshore bond markets. Morgan Guaranty has proposed a yen/dollar dual currency Eurobond that could be hedged into dollars. This structure is compared to Eurodollar Bonds, Euroyen... View Details

Keywords: Acquisition; Capital Markets; Currency Exchange Rate; Credit Derivatives and Swaps; Bonds; Financing and Loans

January 1987
Article

Dividend Behavior for the Aggregate Stock Market

By: Terry A. Marsh and Robert C. Merton

Keywords: Behavior; Stocks; Markets

1987
Article

Dynamic Pricing

By: V. K. Rangan, Pil Hwa Yoo and Robert J. Dolan

Keywords: Price

1987
Other Unpublished Work

Opening the Window: Needs Analysis and Long Term Effort to Pay for College

By: Dutch Leonard

Keywords: Higher Education; Human Needs; Cost

1987
Working Paper

Tests of Excess Forecast Volatility in the Foreign Exchange and Stock Markets

By: K. A. Froot

Simple regression tests that have power against the alternatives that asset prices and expected future asset returns are excessively volatile are developed and performed for the foreign exchange and stock markets. These tests have a number of advantages over... View Details

Keywords: Risk Aversion; Risk; International Investing; International Finance; Risk and Uncertainty; Asset Pricing; Financial Markets; Investment; Behavioral Finance; Volatility

December 1986 (Revised October 1987)
Case

Mexican Debt and Agricultural Policy

By: Ray A. Goldberg

Keywords: Borrowing and Debt; Agribusiness; Policy; Agriculture and Agribusiness Industry; Mexico