An Analysis of Intertemporal Pricing for Forward Foreign Exchange Contracts

An asset-pricing model with an unobservable time-varying risk premium is used to price forward foreign exchange contracts. Specifically, the term spectrum of forward foreign exchange contracts is examined in order to focus on country-specific and maturity-specific information. The testable restrictions imposed by the model are consistent with both cross-country and cross-maturity forward contracts except at the short end of the maturity spectrum for cross-country forward exchange rates. This indicates that the intertemporal model is relatively robust in valuing forward contracts of different maturities and for different exchange rates but that it may fail when there are significant short-term country-specific shocks.     

Australian Audit Reports: 1996–2003

In 1996 Australia revised audit reporting standard AUS 702 to align with many of the concepts in the international audit reporting standard ISA 700. These included preventing auditors issuing a "subject to" qualified opinion, and permitting auditors to modify the audit report in specific circumstances by including an emphasis of matter (EoM) paragraph. This research examines the frequency with which different types of opinions are issued and the circumstances giving rise to the inclusion of an EoM paragraph, and compares the types of opinions issued by the major audit firms and for the various industry sectors over the period 1996–2003.     

An Economic Analysis of Licensure and Public Policy: Evidence from the Social Work Case

Occupational licensure is commonly accepted as a means of protecting consumers by ensuring minimum levels of professional competence. This study analyzes the rationale for licensure in terms of consumer information and consumer choice, applying the analysis to the proposal to license social workers in Tennessee. The analysis makes it possible to separate the numerous issues involved in the licensure question, identifying the probable impact of the proposed measures in terms of a clearer identification of consumers' interests. It is shown that the need for licensure is tied to the manner in which services are provided. In the social work case this means that while the positions of social workers would be enhanced, licensure would offer their client-consumers little protection which they do not already enjoy.     

THE PROPERTY VALUE PREMIUM OF A PLACE OF WORSHIP

Using a unique data set of residential housing values, we improve on previous hedonic pricing and event studies literature to estimate the amenity effects of a new religious structure on local property values. We improve on previous research by extending our analysis with a pre‐ and post‐treatment model. Using a pre‐ and post‐treatment model, we do not find that the religious structure that we examined influenced the value of surrounding properties in the period after its completion. The results suggest that previous research using only post‐completion data may mischaracterize the amenity effects of religious structures. (JEL R3)