July 9, 1985

Running the world's largest commercial bank has never stopped Citicorp executives from dreaming of other new - and profitable - frontiers to conquer. For years, despite Federal laws prohibiting commercial banks from underwriting corporate securities, the bank has tried to become an investment banking powerhouse. Now, after a sputtering start, it believes it has hit upon the right strategy. Instead of primarily competing head-on with the established merger kings of Wall Street or with Europe's deep-pocketed merchant bankers in the giant Eurobond market, Citicorp is seeking its biggest growth from countries, such as Britain, Japan, Australia and Spain, whose financial markets are growing quickly or undergoing radical restructuring. It underwrites stocks and bonds, trades government securities and acts as a stockbroker and private banker for wealthy foreigners, as well as conducting other traditional investment banking activities. The company's selective approach does not always bring it the same recognition as handling $10 billion mergers, but has proved lucrative. Its return on investment, for example, has been more than 30 percent annually for the last two years, the highest for any activity in the bank, according to analysts. And the investment bank's earnings last year of $160 million accounted for roughly 20 percent of Citicorp's $890 million net income.

Apartment dwellers could see rent levels rise by as much as 10 to 20 percent over the next several years under President Reagan's tax revision plan, according to recently completed studies. The studies, by many of the nation's leading economic forecasters and real estate experts, represent the first detailed assessments of the real estate aspects of the Reagan plan. They suggest that if the President's plan passes, rent increases could partly or fully wipe out the direct income tax savings that most renters could be expected to reap from the tax plan. ''If there's one impact of the tax plan that's negative on lower- and middle-income taxpayers, it's the higher rent that they're going to be paying,'' said Kenneth T. Rosen, director of the Center for Real Estate and Urban Economics at the University of California at Berkeley.

EDUCATION Secretary William J. Bennett has asked education researchers to study new questions about course content, student conduct and parental choice that he believes are central to improving American schools. He says school officials and private citizens are demanding practical information about such issues as discipline, homework, test standards and the educational effects of parents choosing private or parochial schools rather than public schools. He has also said he would create an information service in the department to distribute the results of these federally financed studies quickly to the schools and the public. Acting after less than four months in office, Mr. Bennett has thus outlined new policies for the school data the Government gathers, drawn up an agenda of new topics for Federal education research, and proposed a shift in how data and analysis are ap-plied. He said the subjects of Government studies had been too often set by teachers, school administrators and special-interest groups, and that the results had too often gone unread or been filtered through intermediaries such as the teacher-training colleges.

Refco Inc., one of the world's largest futures brokers, today purchased the futures division of Donaldson, Lufkin & Jenrette Inc. The price was not disclosed but both companies said it exceeded the unit's book value, which they did not specify. One analyst estimated that the sale of the money-losing unit was for ''no more than $10 million.''

E.F. Hutton & Company is facing the loss of some important customers in its municipal finance division, traditionally one of its strongest lines of business, as a result of the firm's plea of guilty in May to charges that it had defrauded a number of banks through a check overdraft scheme. The Metropolitan Transportation Authority, a New York State agency, decided at a finance committee meeting last month to remove Hutton from all of its future underwritings. Mortimer L. Downey, chief financial officer for the M.T.A., said the agency made a ''quick decision'' on the matter when it was brought up. He said the decision was based on questions that had arisen concerning both the guilty plea and Hutton's ''general performance.''

The Port Authority, seeking private tenants to replace state agencies in World Trade Center offices, yesterday announced a $700 million, 20-year lease with Dean Witter Financial Services. With the agreement, the Port Authority of New York and New Jersey now has rented more than two-thirds of the 51 floors of state offices in the complex to private tenants and has commitments for all but five of the remaining floors, Port Authority officials said. Under the new lease, the brokerage and investment concern, in consolidating its offices in the city, will occupy 24 floors of 2 World Trade Center in lower Manhattan. The cost will be between $31 and $52 a square foot over the life of the lease, compared to $10 a square foot that current state tenants pay. State offices occupy only one of the center's two 110-story towers.

International President Reagan assailed Iran, Libya, North Korea, Cuba and Nicaragua as ''a confederation of terrorist states'' that had carried out ''outright acts of war'' against the United States. Mr. Reagan, in an address to the American Bar Association, called the five countries ''outlaw states'' and ''a new, international version of Murder Inc.'' [Page A1, Column 6.] The U.S. sought to head off a possible Arab boycott of American airlines and ships. The Reagan Administration said its attempt to isolate Beirut's airport was not meant to be a punishment of Lebanon. [A1:2-3.]

The Reagan Administration, in an effort to head off a possible Arab boycott of American airliners and ships, said today that its plan to isolate Beirut airport was not meant to punish Lebanon. The American plan to ''isolate'' the airport was announced a week ago in retaliation for the hijacking of a Trans World Airways plane and the ensuing Beirut hostage crisis. It included a ban on Lebanese planes landing at American airports and a prohibition on United States airlines from landing in Beirut, both of which remain in effect. The United States also urged other nations to bar Lebanese planes and sought an international agreement to deny landing rights to any government that allowed Lebanese planes to land.

A Washington dispatch in some editions yesterday on the convention of the American Bar Association incorrectly listed the only living former members of the Supreme Court. They are Arthur J. Goldberg and Potter Stewart.

Federal officials and intelligence analysts say that John A. Walker Jr. passed Navy secrets to the K.G.B. in an elaborate scheme that they believe involved espionage training in Austria and the use of Soviet couriers in Washington. In their most extensive account of how they believe the espionage operation was carried out, officials said that Mr. Walker almost certainly dealt with several agents of the K.G.B., the Soviet intelligence agency, in what they maintain was a 20-year spying career. While the officials and analysts say they do not as yet have much specific knowledge of how Mr. Walker may have operated, they have agreed on some theories, based on their familiarity with previous Russian-American spy cases. The officials said that Mr. Walker's case seems to follow what one investigative source described as a ''common pattern'' of Soviet intelligence agencies. Possibility of Soviet Rank The intelligence analysts speculated, for example, that Mr. Walker was awarded a high rank in the Soviet armed forces, probably the Soviet Navy, and received decorations for his information. ''He might very well have tried on his Soviet uniform,'' said Robert T. Crowley, a retired senior official of the Central Intelligence Agency.

In a move expected to intensify competition among suppliers of financial information to brokers and dealers, Dow Jones & Company and the Oklahoma Publishing Company said yesterday that they would buy a majority interest in Telerate Inc. The two companies said they would pay $459.8 million in cash for the 52 percent stake in Telerate now held by Exco International P.L.C. Dow Jones's investment amounts to $282.3 million, which makes the acquisition the largest yet for the publisher of The Wall Street Journal. Analysts said it would greatly enhance Dow Jones's own news ticker and stock and news retrieval system. It may also buoy the fortunes of Telerate, whose once-tremendous growth has slowed recently, in part because of competiton from Reuters, the London-based news and financial data service.

THE Inuvialuktun Language Project has embarked on a venture more curious than selling iceboxes to Eskimos. It is teaching them how to speak their own disappearing dialects. The 3,000 Inuvialuit, as the Eskimos of Canada's western Arctic prefer to call themselves, live in six small communities in the treeless tundra around the Beaufort Sea. The language they speak emphasizes not only close family ties but also the task of survival in a harsh environment. The vocabulary of the Inuvialuit, expressed in three dialects, is enormously varied and precise in its descriptions of that environment. There are, for example, dozens of words to specify different kinds of snow and ice. No one speaks in Inuvialuktun just about going hunting but rather about hunting caribou, whale or other quarry. This kind of exactness extends to descriptions of animals. In the Siglit dialect ''nuyuaqtuyuq'' is a totally wild animal, ''nuyittuq'' is a wild animal unafraid of man and ''pamiqsaaq'' is a domesticated animal.