With the exception of Ross’ APT, classical theories of asset pricing are based on the assumption that the market is populated entirely by rational expected utility maximizing individuals. This assumption was not unreasonable in the mid-1960’s when the CAPM was formulated, since around 85% of US equities were then held by domestic households. However it has become increasingly hard to maintain in subsequent years since, as shown in Figure 1, the share of US common stocks held by households has now dropped to only about 35%.
The share held by domestic institutions is currently 48.8%, while the share held by foreigners is 16%. If we combine the foreign holdings, which are mainly institutional, with the holdings of domestic institutions, then the share of US equities held by institutions is of the order of 65%. Institutional investor demands differ from those of individual investors because of the agency problem that arises from delegated portfolio management: while direct investors are typically concerned only with the return characteristics of their portfolios, investment managers, like corporate managers, have other concerns. Therefore it seems likely that the institutionalization of the equity markets will have a significant effect on the pricing of securities calling for a model of equilibrium that takes account of agency effect.
Mortgages are fixed-income instruments with embedded interest rate, prepayment and default risks Because of the huge market volume, its pricing and risk analysis has been a popular research subject over the past two decades. The unique feature of an MBS compared with a straight bond is the uncertainty of the timing of the principal being returned.
Liquid Nitrogen-Cooled Diamond-Wire Concrete Cutting can be used to cut through thick concrete walls, floors, and structures without using water to cool the cutting wire. The diamond wire is cooled with liquid nitrogen in a 0.9-m (3-ft) long by 7.6-cm (3-in.) diameter pipe housing.
The nitrogen evaporates, so no contaminated liquid waste is generated. Other than the use of liquid nitrogen, the system is a conventional diamond-wire saw assembly with remote hydraulic controls. Setup of the hydraulic-powered drive wheel and the diamond wire for cutting requires a relatively short period of time using people with minimal training. Concrete dust generated during the cutting is considerable and requires control. The production rate of this improved technology is 0.78 m2/hr (8.4 ft 2/hr). The production rates of traditional (baseline) water-cooled diamond-wire cutting and circular saw cutting technologies are 1.11 m2/hr (12 ft 2/hr), and 0.45 m2/hr (4.8 ft2/hr), respectively.
