Factor Models of Stock Returns: GARCH Errors versus Time‐Varying Betas

This paper investigates the implications of time‐varying betas in factor models for stock returns. It is shown that a single‐factor model (SFMT) with autoregressive betas and homoscedastic errors (SFMT‐AR) is capable of reproducing the most important stylized facts of stock returns. An empirical study on the major US stock market sectors shows that SFMT‐AR outperforms, in terms of in‐sample and out‐of‐sample performance, SFMT with constant betas and conditionally heteroscedastic (GARCH) errors, as well as two multivariate GARCH‐type models. Copyright © 2016 John Wiley & Sons, Ltd.     

Crystal structures of DNA/RNA repair enzymes AlkB and ABH2 bound to dsDNA

Escherichia coli AlkB and its human homologues ABH2 and ABH3 repair DNA/RNA base lesions by using a direct oxidative dealkylation mechanism. ABH2 has the primary role of guarding mammalian genomes against 1-meA damage by repairing this lesion in double-stranded DNA (dsDNA), whereas AlkB and ABH3 preferentially repair single-stranded DNA (ssDNA) lesions and can repair damaged bases in RNA. Here we show the first crystal structures of AlkB-dsDNA and ABH2-dsDNA complexes, stabilized by a chemical cross-linking strategy. This study reveals that AlkB uses an unprecedented base-flipping mechanism to access the damaged base: it squeezes together the two bases flanking the flipped-out one to maintain the base stack, explaining the preference of AlkB for repairing ssDNA lesions over dsDNA ones. In addition, the first crystal structure of ABH2, presented here, provides a structural basis for designing inhibitors of this human DNA repair protein.