MONOTONICITY IN THE VOLATILITY OF SINGLE-BARRIER OPTION PRICES

We generalize earlier results on barrier options for puts and calls and log-normal stock processes to general local volatility models and convex contracts. We show that Γ ≥ 0, that Δ has a unique sign and that the option price is increasing with the volatility for convex contracts in the following cases: • If the risk-free rate of return dominates the dividend rate, then it holds for up-and-out options if the contract function is zero at the barrier and for down-and-in options in general. • If the risk-free rate of return is dominated by the dividend rate, then it holds for down-and-out options if the contract function is zero at the barrier and for up-and-in options in general. We apply our results to show that a hedger who misspecifies the volatility using a time-and-level dependent volatility will super-replicate any claim satisfying the above conditions if the misspecified volatility dominates the true (possibly stochastic) volatility almost surely.

POST=DROUGHT REFLECTIONS AND THE IMPORTANCE OF DECISION MAKING

To optimise production at reduced input costs, retain flexibility and continue farming profitably has never been more difficult for farmers, or more important. Retaining the motivation to consistently achieve and the importance of decision making under pressure are two vitally important factors to continued profitability. With a succession of climatic adversities hitting the nation over recent years, it has become increasingly obvious that for many to survive, a major change in attitude is needed. With cash-flow being unpredictable and lumpy, no protective devices previously enjoyed and no cash reserves to fall back on, there is little room for complacency. The last major drought in the Hawke's Bay region highlighted the need for farmers to become aware of the value of decision making. This paper uses drought as the medium to convey the importance of planning and decision making on performance, production and income, as it is a common adversity to which most in the industry can relate. This paper demonstrates the crucial part decision making plays in mitigating the worst effects of drought to ensure a speedy return of normal stock carrying and continuity of income. Keywords: drought, decision making, planning

A Chlamydia from the Peritoneal Cavity of Mice

During continuous intraperitoneal passage of liver and spleen suspension in normal stock mice, a syndrome developed which involved ascites and certain other visceral changes but seldom clinical illness and never fatality. From these mice, a chlamydia was established in yolk sacs of chick embryos and in tissue cultures. This agent readily infects mice when inoculated intranasally but is without effect intracerebrally. It has very low pathogenicity for guinea pigs and is resistant to sodium sulfadiazine. These characteristics, together with results of serum neutralization tests, indicate that the agent is different from the Nigg and DeBurgh strains of mouse pneumonitis.

Influence of diets containing different natural oils on the incorporation of [1-14C]acetate in the various lipid fractions of rat liver

1. A comparative study was undertaken with rats on the effect of various diets (normal stock, fat-free, palm oil and olive oil) on the in vitro incorporation of [14C]acetate by the liver into cholesterol and into the fatty acids of phospholipids and neutral fats. 2. The total lipids extracted from the incubation mixtures were fractionated into acetone-precipitable and digi- tonin-precipitable portions and also into the fatty acids of neutral lipids. 3. The incorporation of [14C]acetate into the acetone-precipitable fraction and into fatty acids of neutral fats was greatest in livers of rats given the fat-free diet, followed by those of the groups given olive oil, the normal stock diet, and palm oil. Livers from the group given the fat-free diet also exhibited the highest percentage of 14C activity in the digitonin-precipitable fraction and were closely followed by the group on the normal stock diet. Compared with those of the other two groups, the livers of the groups given olive oil and palm oil showed much less activity in the digitonin- precipitable fraction. 4. The greater the amount of a specific type of fatty acid in the diet, the less was the 14C activity incorporated into that type of fattyacid in the ncutral fats of liver slices, hut this was not so with the fatty acids obtained froin the acetone-precipitahlc fraction of the lipids.

IRREVERSIBLE HEMORRHAGIC SHOCK IN GERMFREE RATS

Evidence has been provided that a state of irreversible hemorrhagic shock can be induced in a bacteria-free environment in rats reared under germfree conditions. The response to bleeding, the duration of the hypotensive episode and the pathological changes were the same in the germfree and in normal stock rats. The findings are interpreted as evidence opposed to the concept that bacteria or bacterial products are implicated, as primary factors, in the pathogenicity of shock.

NITROGEN UTILIZATION IN CALORIC INSUFFICIENCY

To determine whether a portion of ingested protein can be used for tissue growth when insufficient calories were fed, isocaloric and suboptimal amounts of calories in the form of dextrose or as dextrose and protein hydrolysate (amigen®) were fed to protein-depleted, partially starved, scalded and normal stock rats together with adequate vitamins and minerals. It is concluded that: 1. The greater the need for protein, the greater is the utilization of ingested nitrogen for new protein synthesis under conditions of caloric limitation. Protein-depleted rats are able to build new protein tissue even when basal energy requirements are not completely supplied. 2. Protein depleted, partially starved, scalded and stock animals retain or gain more weight when fed adequate or suboptimal quantities of the hydrolysate-dextrose diet than when fed isocaloric quantities of the dextrose diet. 3. Stock animals with no pre-existing protein loss, and in good nutritive condition, do not utilize dietary nitrogen for tissue building when the caloric intake is suboptimal. 4. When the caloric intake is less than that required to meet the estimated basal energy needs, a diet supplying approximately 20% of the calories as protein supported better growth than those supplying more or less than this amount.

MOLYBDENUM RESPONSES AT INVERMAY

After discussion with Dr E. B. Davies of the Soil Research Station about 2 years ago, the decision was made to lay down a mowing trial on secondclass undulating clay land at Invermay Agricultural Research Station, which is situated at North Taieri on the westerly side of the hills behind Dunedin. This soil has been shown to require heavy applications of lime and phosphate, but even then does not hold grass well under normal stock management. The disappearance of the better grasses is a consequence of the failure of clovers to thrive

THE PRODUCTION OF CHRONIC GLOMERULONEPHRITIS IN RATS BY THE INJECTION OF RABBIT ANTI-RAT-PLACENTA SERUM

1. The injection of rabbit anti-rat-placenta serums in young adult rats produced chronic glomerulonephritis in 18 of 32 animals. 2. The course of the nephritis and the renal lesions were indistinguishable from those obtained in 11 of 13 animals injected with rabbit anti-rat-kidney serum. 3. Six instances of similar renal lesions occurred among 99 control animals. In 2 the rats had been injected with rabbit anti-rat-erythrocyte serum, in 2 with rabbit anti-rat-serum serum, while in 2 others the lesions were found among normal stock.