Gold, whether held in physical form or through financial claims, is of utmost importance to investors, central bankers, and sovereign nations alike. Yet empirically validated explanations of its volatile price remain elusive. Without an ex-post understanding of the determinants of gold prices, ex-ante forecasting is a fruitless endeavor. In this research, an index of US and European economic policy uncertainty is incorporated into a short-run pricing model for gold. The results suggest that in addition to gold being a hedge against inflation, increases in economic policy uncertainty contribute to increases in the price of gold.

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This paper examines the stability, predictability, volatility, time varying risk premiums and persistence of shocks to volatility in the ten Middle Eastern and African (ME&A) emerging stock markets. Although the majority of ME&A markets only recently gained emerging status, one finds that five out of the ten ME&A emerging markets have stable returns over time. On the issue of predictability in the ME&A emerging markets, three different tests have been employed to draw conclusions. It was found that by using the three different tests, one receives slightly different results on predictability. In general, one finds ME&A markets to be unpredictable. The findings on volatility in the emerging market indicate that eight out of the ten markets show evidence of volatility clustering, but in these eight ME&A markets the shocks are not explosive. On persistence of shocks to volatility, one finds only one market to have permanent shocks; and the volatility movement affects the stock market returns. In summary, eight emerging markets have volatility clustering and one market shows positive and significant time varying risk premiums. Overall, the results fail to indicate time varying risk premium in nine of the ten ME&A markets. Although many of the emerging markets in ME&A regions are in the formative stage, it is felt that ME&A equity markets are where investors may find a good return for the investment, considering the trade-off between risk and return. In particular, the correlation is found to be low, which provides investors with the opportunity for diversification.

This study examines the correlation between market equity betas and accounting asset and equity betas in the commercial banking sector. A sample of banks was taken from the COMPUSTAT tapes and annual equity and asset accounting betas (calculated with various indices) were estimated over varying time periods. Cross-sectional correlations were then determined for individual banks and five-bank portfolios. The results indicate that the correlations are comparable to those found in other non-banking studies ofaccounting and market betas. A noticeable difference in our study was the sensitivity ofthe correlations to the length of the estimation interval for the betas. The longest estimation intervals (16-18 years) produce few significant correlations in our sample. These correlations were Significantly lower than those obtained using fifteen or fewer years ofdata. Construction ofportfolios generally increases all the correlations but the longer time period correlations are still significantly lower. The correlations are largely invariant, however, to the choice of index used in the estimation of the betas. . The authors wish to thank Arun J. Prakash for his helpful comments as well as two anonymous referees for their valuable suggestions.

This paper studies the relationship between NBA players' salaries and their performance on the basketball court. In other industries executive compensation has been found to have a weak yet significant link to company performance. We find a positive and significant relationship between an NBA player's salary and a player's points per game and rebounds per game for 1997-98 basketball season. These results may be improved by considering qualitative factors and including more years of data.