Advances In Quantitative Analysis Of Finance And Accounting, Volume 4

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"Advances in Quantitative Analysis of Finance and Accounting" is an annual publication to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession. The papers in this volume cover a wide range of topics including earnings management, management compensation, option theory and application, debt management and interest rate theory, and portfolio diversification.

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ADVANCES IN QUANTITATIVE ANALYSIS OF FINANCE AND ACCOUNTING Volume 4 dito Cheng-Fe ADVANCES IN QUANTITATIVE ANALYSIS OF FINANCE AND ACCOUNTING Advances in Quantitative Analysis of Finance and Accounting Editorial Board Cheng F. Lee Mike J. Alderson James S. Ang K. R. Balachandran Thomas C. Chiang Thomas W. Epps Thomas J. Frecka Robert R. Grauer Puneet Handa Der-An Hsu Prem C. Jain Jevons C. Lee Wayne Y. Lee Scott C. Linn Gerald J. Lobo Yaw Mensah Thomas H. Noe Oded Palmon Louis O. Scott Andrew J. Senchak David Smith K. C. John Wei William W.S.Wei Chunchi Wu Uzi Yaari Rutgers University, USA University of St. Louis, USA Florida State University, USA New York University, USA Drexel University, USA University of Virginia, USA University of Notre Dame, USA Simon Fraser University, Canada University of Iowa, USA University of Wisconsin, Milwaukee, USA Georgetown University, USA Tulane University, USA Kent State University, USA University of Oklahoma, USA University of Houston, USA Rutgers University, USA Tulane University, USA Rutgers University, USA Morgan Stanley Dean Witter, USA University of Texas, Austin, USA Iowa State University, USA Hong Kong Technical University, Hong Kong Temple University, USA Syracuse University, USA Rutgers University, USA ADVANCES IN QUANTITATIVE ANALYSIS OF FINANCE AND ACCOUNTING Editor Cheng-Few Lee Rutgers University, USA YJ? World Scientific NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ADVANCES IN QUANTITATIVE ANALYSIS OF FINANCE AND ACCOUNTING Advances in Quantitative Analysis of Finance and Accounting — Vol. 4 Copyright © 2006 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. ISBN 981-270-021-8 Typeset by Stallion Press Email: [email protected] Printed in Singapore by World Scientific Printers (S) Pte Ltd Preface to Volume 4 Advances in Quantitative Analysis of Finance and Accounting is an annua