In a futures market with a daily price‐limit rule, trading occurs only at prices within limits determined by the previous day's settlement price. Price limits are set in dollars but can be expressed as return limits. When the daily return limit is triggered, the true equilibrium futures return...

A simple trading model employs Bayes Rule to aggregate traders' forecasts about risky assets' returns. Bayes Rule operates like an omnipotent market-maker in performing tasks that in 1776 Adam Smith attributed to the "invisible hand."

We show how to construct uniform pricing frameworks for various insurance products that have prespecified deductibles. It is shown that the deductible insurance policies' indemnity payoff functions resemble those of distinctive derivative securities; therefore, the actuarially fair premia can be...