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I survey applications of Markov switching models to the asset pricing and portfolio choice literatures. In particular, I discuss the potential that Markov switching models have to fit financial time series and at the same time provide powerful tools to test hypotheses formulated in the light of financial theories, and to generate positive economic value, as measured by risk-adjusted performances, in dynamic asset allocation applications. The chapter also reviews the role of Markov switching dynamics in modern asset pricing models in which the no-arbitrage principle is used to characterize the properties of the fundamental pricing measure in the presence of regimes.

On May 18, 2014, AT&T Inc., the second-biggest U.S. mobile-phone carrier, agreed to acquire DirecTV, a satellite-television company, for $49 billion in cash and stock. However, the merger’s conditions and terms are complicated as the stock exchange ratio is contingent on the volume-weighted average AT&T stock price over a 30-day period that is three trading days prior to the date when the merger becomes effective.

Using a contingent claims pricing approach, we model DirecTV’s theoretical value based on the merger’s conditions and terms. It is shown that the theoretical DirecTV stock value is analogous to the sum of the present value of a cash offer, plus owning shares of the AT&T stock, and short volume-weighted average price (VWAP) call spreads. Using three different option-pricing models, DirecTV’s stock valuation model is tested with the market data. Empirical results show that on average, DirecTV’s stock was consistently priced at a discount during the sample period, and Funahashi and Kijima’s (2017) VWAP option model works better than Black and Scholes’ (1973) plain vanilla option model and Levy’s (1992) average-price option model.

The current and widespread view in option trading is that early exercise of call options is suboptimal unless there are large dividend payments on the underlying stock (e.g., Finucane, 1997; Hull, J. C. (2008). Options, futures and other derivatives (7th ed.). Upper Saddle River, NJ: Prentice Hall; Poteshman & Serbin (2003)). Our study substantially refines this view by demonstrating that U.S. tax rules governing capital gain holding periods can create incentives for early exercise under certain conditions. Hence, this study adds to the factors that investors likely consider when making option exercise decisions. We further note that recent research documents early exercises in the absence of large dividends, and refers to these option exercises as “clearly irrational.” Predictions of early exercise from our tax-based model are consistent with the observed patterns of early exercise, suggesting that the criteria for denoting an option exercise as “irrational” should be refined to incorporate capital gain holding periods.

The marketing strategy begins with the identification of human needs and discharges into the application of a combination of marketing variables (product, price, distribution, sales promotion and publicity). Motivations for buying a tourist product in an affluent society are not only the reflection of a person's physical needs. They also arise from social‐psychological needs. With the ‘erosion of traditional class‐determined patterns of behavior’, even the usual social‐class variables are losing their importance in explaining buying behavior.

Briefly reviews previous literature by the author before presenting an original 12 step system integration protocol designed to ensure the success of companies or countries in their efforts to develop and market new products. Looks at the issues from different strategic levels such as corporate, international, military and economic. Presents 31 case studies, including the success of Japan in microchips to the failure of Xerox to sell its invention of the Alto personal computer 3 years before Apple: from the success in DNA and Superconductor research to the success of Sunbeam in inventing and marketing food processors: and from the daring invention and production of atomic energy for survival to the successes of sewing machine inventor Howe in co‐operating on patents to compete in markets. Includes 306 questions and answers in order to qualify concepts introduced.

The first statutory meeting of the Pure Food and Health Society of Great Britain was held on October 16 at the registered offices of the Society, 20, Hanover Square, W. LORD CAMOYS, Chairman of the Executive Committee, presided. In opening the meeting LORD CAMOYS said:—

The purpose of this paper is to examine the temporal effects of perceptions of information obtained from social networks (SNS) on online shopping behavior using trust as a mediator. The model adopts the two dimensional view of trust: cognitive and affective trust. The direct effects and indirect effects of information perceptions on behavioral intentions are empirically explored using a longitudinal approach. Specifically, we investigate the comparative roles of cognitive and affective trust on the influence of perceptions of information from SNS on online shopping behavior.

The study was fielded at two points in time (T and T+1) that were approximately 14 months apart. The survey (T) was distributed via e-mail to 1,484 prospects. From this mailing, 297 prospects who had not replied and another 145 with missing data were removed, leaving 1,042 respondents. In all, 14 months later, the survey (T+1) was e-mailed to these 1,042 respondents who took part in the survey at time point T. At time point T+1, only 341 respondents from the original sample responded. After excluding those with missing values, the final sample included 313 respondents.

The results show significant carryover effects from time T to time T+1 in perceptions of information obtained from a social network, in behavioral intentions and in both dimensions of trust. Furthermore, the study revealed that over time, the influence of affective trust is greater than that of cognitive trust, both in its effect on behavioral intentions as well as in its mediating role between information perceptions and behavioral intentions.

The study contributes to the literature on the mediating roles of cognitive and affective trust in the development of behavioral intentions on over time in the social network environment.

This paper models the lessee's default options and estimates the economic value of the options for a lessee using a discrete time binomial American option pricing model. Results show a positive relationship of the option premium with the original rent and a negative relationship with the relocation costs. Finds that the default probability is higher for lessees who are more sensitive to rental changes and place less emphasis on the fitting‐out quality. Suggests that rental volatility and rental growth rate are two significant factors that have positive relationships with the default option values. The risk‐free rate, on the other hand, has an inverse relationship with the default option values because a higher risk‐free interest rate reduces the present value of rental savings. Lease term length to expiration has a positive effect on the default option value, implying that the default option premium will decay as the term to expiry is shortened.