DISCUSSION.

The main theme of Professor Fewing's paper can be summarized as follows. A change in the time preference rate effects the nondiversifiable risk of a stock. Such a change in the nondiversifiable risk is transmitted via the growth factor. Thus, the higher the growth rate, the larger are the changes in the nondiversifiable risk of a stock triggered by a change in the time preference rate. The change in the time preference rate and the change in the nondiversifiable risk are positively related. Economic rationale suggests that unless the change in the time preference rate differentially interacts with the cashflow stream, which is totally excluded from consideration in the paper, stocks of all corporations would be similarly affected by this change. That is, there would be no differential changes in the nondiversifiable risk of the stocks with varying degrees of growth resulting from an exogenous change in the time preference rate. This can be simply demonstrated using the author's final results contained in his equation (14). [ABSTRACT FROM AUTHOR]