No abstract

Many theoretical bond pricing models predict that the credit yield curve facing risky bond issuers is downward-sloping. Previous empirical research~Sarig and Warga~1989!, Fons~1994!! supports these models. Our study examines sets of bonds issued by the same firm with equal priority in the liability structure, but with different maturities, thus holding credit quality constant. We find, counter to prior research, that risky bonds typically have upward-sloping credit yield curves. Moreover, when we combine our matched sets of bonds~no longer controlling credit quality!, the estimated slope is negative, indicating a sample selection bias problem associated with maturity.

Risk prenila in t lie stock titarket are assumed to move svitlm ti ume varying risk. We present a model in which the variance of time excess return of a portfolio depends ott a state variable generated by a first-order Markov process. A model in which the realization of the state is knosvn to economic agents, hut uuknosvn to the econometrician. is estimimated. 'l'lme paraumeter estimates are found to iimmply that time risk premium declines as time variance of returns rises. We then extend the nmodel to allosc agents to he uncertain about time state. Agents make their decisions in tseriod I using a prior distribution of time state based only on past realizations of the excess return t hrouglm period /-I plus knowledge of the structure of the model. TIse paraisseter estimates from this imsodel are consistent witis asset pricing theory.

We have found that the actin and microtubule cytoskeletons have overlapping, but distinct roles in the morphogenesis of epidermal hairs during Drosophila wing development. The function of both the actin and microtubule cytoskeletons appears to be required for the growth of wing hairs, as treatment of cultured pupal wings with either cytochalasin D or vinblastine was able to slow prehair extension. At higher doses a complete blockage of hair development was seen. The microtubule cytoskeleton is also required for localizing prehair initiation to the distalmost part of the cell. Disruption of the microtubule cytoskeleton resulted in the development of multiple prehairs along the apical cell periphery. The multiple hair cells were a phenocopy of mutations in the inturned group of tissue polarity genes, which are downstream targets of the frizzled signaling/signal transduction pathway. The actin cytoskeleton also plays a role in maintaining prehair integrity during prehair development as treatment of pupal wings with cytochalasin D, which inhibits actin polymerization, led to branched prehairs. This is a phenocopy of mutations in crinkled, and suggests mutations that cause branched hairs will be in genes that encode products that interact with the actin cytoskeleton.