HEATH–JARROW–MORTON INTEREST RATE DYNAMICS AND APPROXIMATELY CONSISTENT FORWARD RATE CURVES

We study a finite-dimensional approach to the Heath–Jarrow–Morton model for interest rate and introduce a notion of approximate consistency for a family of functions in a deterministic and stochastic framework. This amounts to asking the decrease of the minimum distance in least squares sense. We start from a general linearly parameterized set of functions and extend the theory to a nonlinear Nelson–Siegel family. Necessary and sufficient condition to have approximately consistency are given as well as a criterion of stability for the approximation.     

Reliability of Assessment of Reading Ability in Three Countries

Over the last few decades, there have been a number ofnational and international programmes to assessperformance in key subjects. For example theInternational Association for Evaluation ofEducational Attainment (IEA), International Assessmentof Educational Progress (IAEP), and the ThirdInternational Mathematics and Science Survey (TIMSS)programs have aimed to compare performance betweenparticipating countries.Such exercises have different requirements from thosetests, such as public examinations, which aim toassess the attainment of individuals. National andinternational assessments aim to cover a very widerange of materials, and often use the technique ofmultiple matrix sampling to do so.The investigation is based on generalizability-typeanalyses of three national data sets at two ages, andlooks not only at the variance components arising fromsampling of schools, and of pupils within them, butalso at the variation between different assessmentinstruments, and between items within assessmentinstruments. If interpreted with care, such resultscan be of value in the design of future studies. Thispaper concentrates largely on the precision ofestimates of overall means, but analyses of the typedescribed could also be used to compare theperformance of subpopulations.     

Overreaction to extreme market events and investor sentiment

This article investigates the role of investor psychology, captured here by investor sentiment index, in driving individual stock price reactions to extreme movements in the broader market. In addition to confirming prior evidence of overreaction, we find much stronger overreaction when investor sentiment is low rather than high. This is consistent with the role of the contrast dimension of an uncommon event, suggested in the psychology literature, over and above the emotion of surprise it brings about. In a low sentiment environment, the contrast is sharper and hence leads to stronger overreaction.     

Process completeness: Strategies for aligning service systems with customers’ service needs

Increasingly, customers are expecting more and better service. As such, enterprises need guidelines and frameworks for addressing these expanding requirements. The concept of process completeness helps us to consider service from the customer's viewpoint; arguably, the only perspective to take. Process completeness is achieved when a firm's service delivery system matches the typical customer's breadth of expectations. While customers think in sets of services (e.g., I need a flight, a hotel, airport parking, wireless Internet), firms think in terms of single services (e.g., we can provide a flight). There are four basic service systems: (1) transaction—execute a basic request and nothing else, (2) process—handling all firm-related service requests through one touch point, (3) alliance—handling service requests through a single touch point via stitching together a static firm-selected alliance of service partners, and (4) agility—handling service requests through a single touch point via stitching together a dynamic customer-selected alliance of service partners. In addition to exploring the four service systems, this article guides executives regarding the selection and implementation of the appropriate service strategy that meets their typical customer's process completeness expectations.