This study measures the efficiency of the branching network of a large U.S. commercial bank over 1989-1991. We find that branches are on average about half of cost-efficient level, so that there are about twice as many branches as would minimize costs. This 'overbranching' raises operating costs...

A long standing puzzle in the Capital Asset Pricing Model (CAPM) has been the inability of empirical work to validate it. This paper presents a new approach to estimating the CAPM, taking into account the differences between observable and expected returns for risky assets and for the market...