We find that consumption risk is lower in states that implement countercyclical fiscal policies. Moreover, firms with an investor base that is concentrated in countercyclical states have lower stock returns, along with firms that relocate their headquarters to a countercyclical state. Therefore, countercyclical fiscal policies lower the consumption risk of investors and, consequently, their required equity return premium. This conclusion is confirmed by smaller declines in market participation during recessions in countercyclical states. Overall, the location of a firm’s investor base enables state-level fiscal policy to influence stock returns.

The growth rate of industrial electricity usage predicts future stock returns up to 1 year with an R2 of 9%. High industrial electricity usage today predicts low stock returns in the future, consistent with a countercyclical risk premium. Industrial electricity usage tracks the output of the most cyclical sectors. Our findings bridge a gap between the asset pricing literature and the business cycle literature, which uses industrial electricity usage to gauge production and output in real time. Industrial electricity growth compares favorably with traditional financial variables, and it outperforms Cooper and Priestley’s output gap measure in real time.

We examine the relation between chief executive officers’ equity incentives and their use of performance-sensitive debt contracts. These contracts require higher or lower interest payments when the borrower’s performance deteriorates or improves, thereby increasing expected costs of financial distress while making a firm riskier to the benefit of option holders. We find that managers whose compensation is more sensitive to stock volatility choose steeper and more convex performance pricing schedules, while those with high delta incentives choose flatter, less convex pricing schedules. Performance pricing contracts therefore seem to provide a channel for managers to increase firms’ financial risk to gain private benefits.

In order to design liquid lens which works in a severe environment such as high temperature and high humidity, several layered liquid systems are investigated. Especially, the change of the interface between conducting and non-conducting liquid layers has been traced by using empirical molecular dynamics simulation and density-functional theory calculation. The stability of the liquid layers at high temperature was evaluated by simulation results such as the density profile of liquid components, their distribution near the interface, the interface thickness and chemical reactivity between them, which depends on the molecular species consisting of liquid and their concentrations. We found that the organic solvent including halogen atoms, alkyl halide, easily penetrates into conducting liquid layer and reacts with its substances, which is added to increase refractive index and density of non-conducting liquid. We also presented an optimized solution including the minimum organic solvent and satisfying the requisites for an optical device.