Black-owned banks: Issues and recommendations

Conclusion A number of suggestions have been made here which could be used to advantage by black banks. Several are already being used on a limited scale. In addition to instances cited previously, there are several other black or “interracial” banks which have located in white areas. Among these are the Universal Bank located in the Wall Street area of New York City; the interracial Vanguard National Bank in Hempstead, New York, a Long Island suburban area; and the American State Bank of Tulsa, Oklahoma, with a reported 30 percent white customers. Similarly, the black United Mortgage Bankers Association (UMBA) is in the process of using the device of pooling of mortgages. This article first appeared in theCalifornia Management Review no.1 (Fall 1974), and is reprinted with their permission.     

Book-to-Market Components, Future Security Returns, and Errors in Expected Future Earnings

This study investigates whether the ability of book-to-market to predict returns derives from systematic errors in the market's expectation of future earnings. We extend Beaver and Ryan (1996, 2000) by decomposing book-to-market into a more persistent (bias) component and a delayed recognition (lag) component. We find that both components are related to analyst expectations of future earnings, but the lag component is the dominant factor across all forecast horizons. Similarly, we find that the lag component explains most of the inverse relation between book-to-market and future returns. Given that lag is constructed by regressing book-to-market ratios on lagged price changes, our results are consistent with the lag component capturing systematic stock price reversals. We find that the components have unique relations with subsequent earnings forecast revisions, and controlling for these relations substantially mitigates the components' ability to predict returns. Our component-level analysis provides insight into how expected future earnings, summarized in book-to-market ratios help to explain this market anomaly.     

Table of Contents Volume 24 2004

Volume Contents

Table of Contents Volume 24 2004     

The 2010 HMGs Ten Years Later: Where Do We Go From Here?

Review of Industrial Organization - In this article, which is part of the Symposium on the Tenth Anniversary of the 2010 Horizontal Merger Guidelines, we suggest a number of improvements that...     

Prioritizing Project Selection

We consider capital investments under uncertainty. A typical approach to this problem, when the problem parameters are assumed known, is via a multi-knapsack model. This model takes as input annual budgets as well as the cost streams and profit—i.e., net present value (NPV)—of each project. Its output is a portfolio of projects with the highest total NPV, observing yearly budget constraints. We argue that such a portfolio fails to hedge against uncertainties in the budgets, the cost streams, and the profits. As an alternative, we propose a model that forms an optimal priority list of projects, incorporating multiple scenarios for these input parameters. We apply our approach to two sets of example projects from the South Texas Project Nuclear Operating Company.     

The Influence of Regulatory Focus on the Effect of Product Cues

The purpose of this study is to explore the extent to which informational cues interact with individuals’ motivational states during their evaluation of a product. This article confirms the interaction effects between informational cues and motivational states by examining product attributes and advertising appeals as informational cues, and regulatory focus as a motivational state. The results from three studies indicate that consumers with promotion focus find extrinsic cues as more important and have more favorable evaluation toward a product with superior extrinsic cues. Prevention‐focused consumers, however, perceive intrinsic cues of a product as more important, and thus have more favorable evaluation toward a product with superior intrinsic cues.