This article assesses recent changes in the structure of the municipal bond market. It reviews the tax legislation, judicial interpretations, and other factors that affect the yield on municipal bonds. These factors are then employed in a statistical analysis of the determinants of municipal...

Investors can participate in the returns on the Standard and Poor's 500 composite index in a variety of ways, and these alternatives exist because they differ in important respects. This article assesses one dimension of these differences-margin requirements. ; Focusing on equity-related...

Over the years, the Board of Governors of the Federal Reserve System has established margin regulations to limit purpose loans by banks and nonbanks to broker-dealers or other borrowers. In this study, the author reviews those regulations affecting security lending by banks and nonbanks. He...

The Board of Governors of the Federal Reserve System establishes initial margin requirements under Regulations T, U, and X. Recent margin loan increases, both in aggregate value and relative to market capitalization, have rekindled the debate about using margin requirements as an instrument to...

Since the mid 1980s the mutual fund industry has enjoyed explosive growth in the number of funds, the types of funds available, and total assets under management. Much of this growth is the result of the increasing convenience offered to owners of long-term assets. Mutual funds offer portfolio...

Perhaps the most widely held view of the Crash of 1987 is the Cascade Theory: the Crash emerged from the interaction of stock prices with new financial strategies such as program trading and portfolio insurance, which use new financial instruments including stock index options and futures....

Trading volume and open interest in options and futures contracts on stock indices, equities, and interest rate instruments traded on world exchanges have experienced remarkable growth. However, this growth has been accompanied by controversy about the proper role of financial derivatives and...

During the recent flat tax debate, interest rates on long-term municipal bonds rose relative to the rate on U.S. Treasury bonds. This was widely attributed to expectations of a reduction in future tax rates. While an axiom of finance states that current asset prices reflect expectations about...

This article assesses the current state of the efficient market hypothesis, which was the conventional wisdom among academic economists in the 1970s and most of the 1980s. It concludes that empirical evidence provides an overwhelming case against the efficient market hypothesis. The evidence...

In 1973, Myron Scholes and the late Fischer Black published their seminal paper on option pricing. The Black-Scholes model revolutionized financial economics in several ways: It contributed to our understanding of a wide range of contracts with option-like features, and it allowed us to revise...