The tax and inflation effects on the abandonment and replacement policies are examined for capital assets. The tax effect is shown to defer abandonment for some classes of assets while the asset duration is shortened for others depending on the characteristic of the marginal rates of return of...

Conventional event study methodologies that require a stationary return generating process are generally not applicable to option studies because options are known to have constantly changing risk-reward characteristics over time. Nevertheless, this paper attempts to analyze call price behavior...