DISCUSSION.

The article presents comments on the article "The Expected Holding Period Return, Uncertainty and the Term Structure of Interest Rates" by John S. McCallum, published within the issue. The author voices some criticisms of the hedging pressure model employed in McCallum's research, chiefly that the model fails to incorporate interest rate risk. He asserts that McCallum fails to incorporate the central issue of uncertainty into his argument, but nonetheless clarifies the limitations of the market model and betas used in this context.