Storage changes in biscuits

The purpose of this research was to investigate the changes occurring in biscuits under domestic storage conditions. The experimental work involved the storage of manufactured biscuits under closed, open/light and open/dark conditions for appropriate periods of time. Moisture content, texture, colour and peroxide value were determined throughout the storage time. The results indicate that the moisture content of the samples increased under all storage conditions, with a softening of texture. Peroxide values increase with rapid acceleration towards the end of the storage period. Very little change was observed in the colour of the biscuits.     

The Structure and Incentive Effects of Corporate Tax Liabilities

This paper describes situations in which tax liabilities assume the form of a negative position in a call option. This structure motivates an examination of the investment decisions of taxed corporations in the presence of risk. It is shown that the structure of the tax liability creates an incentive to underinvest in more risky projects and an incentive for conglomerate merger. These effects are then evaluated in the presence of conflicts of interest between stockholders and bondholders, and under alternative assumptions about the tax code, and about the timing of investment and financing decisions.     

Commentary: Research Productivity Measurement and the Field of Academic Accounting*

The previous issue of Canadian Accounting Perspectives contained three studies that examined various aspects of performance measurement in universities. In this issue, we step back from the acts of performance measurement and disclosure to consider the context within which the demand for increased performance measurement has arisen. The current commentary considers the use of research productivity measures in the field of academic accounting and why the use of these measures is drawing such an equivocal response from academics in the field. Starting from three theoretical perspectives, we consider the use, response, and consequences associated with research productivity measurement.     

Japan's Security Policy in East Asia

Japan's strategic thinking has been driven by three main factors: a fear of isolation, calculation of the geopolitical strength of China (and to a lesser extent, Korea), and accommodation to the prevailing international power structure. During the Cold War Japan aligned with Washington, but maintained sufficient distance to explore a mutually beneficial relationship with China based on Japan's dominant economic position. As Chinese power has grown and Japan's own economic tools for statecraft have slowed, Tokyo has moved closer to the United States to balance Chinese power. Japan has also had to seek new ways to shape the security environment in Asia, turning to multilateral diplomacy such as the Changmai Initiative. Where Japan's diplomacy in Asia in the 1980s and 1990s emphasized Japan's unique ability to champion "Asian" values with the West, increasingly Tokyo has emphasized its unique ability to champion universal values of democracy and rule of law in Asia. This theme has been used by conservative governments to improve Japan's brand over China, but also builds on a tradition of Japanese diplomatic efforts to take a lead in rule-making in the region. Prime Minister Koizumi's assertive foreign policy helped to reinvigorate Japan's international position, but he moved from the traditional three part formulation of Japan's orientation – the U.S. alliance, the UN system and Asia – to a simpler two part formulation of "the U.S.-Japan alliance and international cooperation." The lack of focus on Asia has contributed to growing tensions with South Korea and China over history issues, even as Japan's global and broader regional standing has increased according to most opinion polls. These regional challenges will continue to confront future Prime Ministers well past Koizumi.     

When Will Mean-Variance Efficient Portfolios Be Well Diversified?

We characterize the conditions under which efficient portfolios put small weights on individual assets. These conditions bound mean returns with measures of average absolute covariability between assets. The bounds clarify the relationship between linear asset pricing models and well-diversified efficient portfolios. We argue that the extreme weightings in sample efficient portfolios are due to the dominance of a single factor in equity returns. This makes it easy to diversify on subsets to reduce residual risk, while weighting the subsets to reduce factor risk simultaneously. The latter involves taking extreme positions. This behavior seems unlikely to be attributable to sampling error.     

Racial Differences in Consumer Environmental Concern

Past research has suggested that black and white consumers differ in their concern for the environment. The general consensus has been that whites are significantly more concerned than blacks about environmental issues. Most of this research, however, Is limited in scope and fails to account for variables, such as education and income, which may help to explain these differences. This study investigates and analyzes black and white consumer environmental concern. Results of this study indicate that there are significant differences between African-Americans and white Americans in their environmental concern at lower income and educational levels. However, as income and education rise, the gap in environmental concern between blacks and whites significantly decreases. These findings provide important implications for policy makers in making decisions related to environmental education and protection as well as for businesses intending to target consumers with environmentally focused promotional campaigns.     

Are There Tax Effects in the Relative Pricing of U.S. Government Bonds?

We investigate the impact of the Tax Reform Act of 1986 on the relative pricing of U.S. Treasury bonds. We obtain positive statistically and economically significant estimates for the implicit tax rates of a “representative” investor in the late 1970s and early 1980s. After the 1986 Tax Reform, the point estimates for the tax rate are close to zero. Tests for a regime shift associated with the 1986 Tax Reform support the hypothesis that this event largely eliminated tax effects from the term structure. We discuss both institutional and statutory explanations for this change.     

Positively Weighted Portfolios on the Minimum-Variance Frontier

Duality theory is employed to provide necessary and sufficient conditions for portfolios on the minimum-variance frontier to have positive investment proportions in all assets. These conditions involve the feasibility of portfolios that have non-negative correlation with all assets and positive correlation with at least one. Using these results, several “qualitative” results concerning the signs of investment proportions in efficient portfolios are proved. It is argued that the conditions that ensure all-positive weights in efficient portfolios are intuitively compelling and are not unique to the CAPM. With large numbers of assets, however, the signs of weights in minimum-variance portfolios can be very sensitive to slight departures from these conditions due to, for example, sampling error.