Capital Asset Pricing Model: Should We Stop Using It?

The Capital Asset Pricing Model (CAPM) predicts that expected returns on securities are a positive linear function of their market ß s (betas) and market ß is adequate to describe the cross-section of expected returns. There is a controversy regarding the empirical validity of CAPM. This article reviews the content and scope of the model, examines the issues in the controversy, and provides an empirical assessment of the model in India. It notes that the evidence is not sufficient to drop the use of CAPM; one must, however, recognize and understand its limitations.

Variations in Flowering, Vegetative Growth, and Dry Matter Partitioning Induced by Photoperiod and Temperature Treatments in Papaver somniferum

Estimating yields of illicit narcotic crops requires knowledge of how climate, soil, and geography affect these crops. One method for estimating yields is to create databases from which to develop simulation models. This experiment is part of one of those databases, designed to determine if flowering time can be affected in young poppy seedlings by manipulating photoperiod (PP) and temperature. Plants were grown in chambers under a 12-, 13-, 14-, or 24-h PP and a 12-h thermoperiod of 25/20C. Plants at 10 or 20 days after emergence were transferred to separate chambers and treated for 48 h with either a) 10C and a 12-h PP or b) a 24-h PP and a 12-h thermoperiod of 25/20C. Days to flowering (DTF) decreased with increased PP, especially between 12 and 13 h. The 48-h PP interruption decreased DTF for PPs <24 h for both seedling ages, the effect being more pronounced for 10 d and for the 12-h PP. The 48-h 10C interruption had no effect on DTF. The poppy capsule, from which the gum is harvested, was a larger proportion of the shoot biomass under PPs >14 h, but capsule biomass was a positive linear function of DTF. DTF depends on PP and biomass at flowering depends on DTF.

Stimulus-Response Compatibility in a Small Sample of Cerebral Palsied Adults

Stimulus-response compatibility refers to the correspondence between a sensory event and the motor response which it specifies. A discrete aimed movement task with two conditions of stimulus-response compatibility tested whether higher compatibility would decrease the reaction time of 5 subjects with normal movement and 6 subjects with cerebral palsy. A board with 3 distances (13.5, 28.0, 40.5 cm) along each of 3 rays (45°, 90°, 135°) provided 9 target sites for a detachable leaf switch. A light on the switch was turned off or on for the low or high compatibility condition. The independent variables were the Index of Difficulty, target position and compatibility. The dependent variables were reaction time and movement time. The reaction times for both groups were less during the high compatibility condition than during the low compatibility condition as shown by a t test for differences between means. Multiple regression analyses showed that reaction time of the normal group was a positive linear function of compatibility and movement time was a positive linear function of the Index of Difficulty for both groups and of position for the normal group, 3 normal subjects and 2 cerebral palsied subjects. There were indications of ballistic rather than aimed movements. The results are discussed with regard to the role of visual fixation in aimed movement, the similarities between groups in conformance to Fitts' Law and differences between groups in reaction and movement times.

Influence of current velocity, density, and detritus on drift of two mayfly species (Ephemeroptera)

Drift responses of Baetis tricaudatus Dodds and Ephemerella inermis Eaton larvae to manipulations of benthic density, sterile detritus, and current velocity were monitored in laboratory streams. The proportion of larvae departing from the substrate was independent of benthic density, amount of detritus, and interactions between these two variables. In spring, departure of larvae of both species was a positive linear function of current velocity during daylight hours. In darkness, departure of B. tricaudatus larvae became a negative linear function of current velocity. Nocturnal drift of E. inermis larvae was minimal at a mean current velocity of 25 cm∙s−1 and greater at both higher and lower velocities. None of the factors tested influenced departure of B. tricaudatus larvae in autumn experiments. Dead larvae were eroded from the substrate in much smaller proportions than were their live counterparts. This suggests that appearance in the water column of live animals is the direct or indirect consequence of individuals' behaviour. Departure of animals during daytime is largely passive in nature, whereas a substantial proportion of nocturnal drift probably results from active desertion of the substrate.

Effects of Stimulus Incongruity, Task Demand, and Induced Involvement on Amplitude of GSR

Previous investigations into the arousing effects of incongruity have not only reported inconsistent findings but have displayed the limitation of using only two levels of incongruity. An experiment using four levels of incongruity confirmed the hypothesized positive linear function between incongruity and arousal (as measured by GSR amplitude). However, the results of two additional experiments confirmed the hypothesis that the marked arousing effects of incongruity were attributable at least in part to the demands of the task employed which included subjects having to choose and verbally commit themselves to one of the alternatives. The interaction between incongruity and degree of involvement engendered by the task demand suggests that involvement may facilitate the arousing effects of additional collative variables such as novelty, uncertainty, and complexity.

A note on right invariant integrals on locally compact semigroups

An integral on a locally compact Hausdorff semigroup S is a nontrivial, positive linear function μ on the space K(S) of real-valued continuous functions on S with compact support. If S has the property: is compact whenever A is compact subset of S and s ∈ S, then the function fa defined by fa(x) = f(xa) is in K(S) whenever f ∈ K(S) and a ∈ S An integral on a locally compact semigroup S with the property (P) is said to be right invariant if μ(fa) = μ(f) for all f ∈ K(S) and a ∈ S.