This paper first examines the effect of two basic types of investment performance fees, which differ in the method of performance measurement, on the amount and variability of investment advisory compensation. Then this effect is related to the risk borne by fund investors. From this analysis,...

The purpose of this comment is to provide further clarification of the usefulness of Beta as a measure of risk in the regulatory process. Breen and Lerner list several of the problems in using this coefficient and argue that a great deal of caution is necessary when interpreting its meaning, but...

This paper is an analysis of how a firm behaves in the face of uncertainty about demand and cost conditions and a known constraint on the rate of return it is allowed to earn. Under these conditions it is improbable that regulation could force a monopoly to make competitive investment and output...

The purpose of this paper is to formulate the implications of finance theory for rate of return regulation. A variety of problems in finance and the law and economics of regulation are reviewed. Also, a regulatory procedure based on finance theory is proposed for practical use.