For individual securities, we made use of the security market line (SML) and its relation to expected return and systematic risk (beta) to show how the market must price individual securities in relation to their security risk class.

Several companies took advantage of the drop in Treasury bond yields to price new securities yesterday, after a larger-than-expected rise in the weekly unemployment claims data.

Heavy Corporate Borrowing Issuance of new corporate debt remained heavy yesterday, as companies fearing an outbreak of war came to market to price new securities.

In the process, Fidelity rankled a number of customers and brought to light just how much discretion fund companies have in pricing certain foreign securities.

But a number of other companies also priced new securities.

Behaviorists argue that investors often behave 'irrationally' when making investment decisions thereby incorrectly pricing securities, which causes market inefficiencies, which, in turn, are opportunities to make money.

All the correctly priced securities are plotted on the SML.

The resulting flood of bargain priced asset-backed securities (ABS) could further destabilize the credit markets and perhaps force the parent institutions to place the SIVs on their balance sheets, indirectly reducing the amount of money the banks could then loan.

Few issuers of corporate or municipal debt are expected to price securities for offering to the public during this holiday- shortened week.

The funds have used this method, although rarely, to price securities during times of foreign market turmoil.