Background Risk and the Performance of Insurance Markets under Adverse Selection

Background risk can influence the performance of insurance markets that must deal with adverse selection when applicants are risk vulnerable, since they are more averse to bearing the insurable risk as a result of their exposures to background risk. We show that background risk always results in a lower deductible for the incentive constrained contract, and that a broader range of markets attains the stable sequential equilibrium cross-subsidized pair of separating contracts. We conclude that background risk always improves the performance of markets for coverage against (insurable) foreground risks that must deal with adverse selection. We also find, however, that these improvements are never sufficient to offset the cost to insureds of bearing the background risk.     

关于高校财务管理的几点思考

伴随着全面改革的深入,高校财务管理工作应进行如下改革:一是打通内外资金渠道,实行综合财务管理;二是建立健全硬化内部财务管理制度来规划学校的经济活动;三是转变会计职能,拓宽会计领域;四是充分挖掘内部潜力,提高现有资金的使用效益.如此才能满足高等学校教育体制改革的需要.     

THE HOLIDAY EFFECT IN STOCK RETURNS: EVIDENCE FROM THE OTC MARKET

The patterns of daily returns in over-the-counter (OTC) stocks are examined to determine if a holiday effect exists in the OTC market. For the sample period of 1973–1989, test results provide evidence of unusually high returns on pre-holiday trading days and unusually low returns on post-holiday trading days in the OTC market. Additional analyses indicate that other documented calendar anomalies do not cause the pre-holiday effect, but the day-of-the-week effect apparently drives the post-holiday effect.