the Markowitz mean-variance framework to derive estimates of the pre-tax, real risk-return tradeoff curve currently facing … an investor in the U.S. capital markets. Some of the major findings are: 1) Bills are the cornerstone of any low-risk … investment strategy. The minimum-risk portfolio has a mean real rate of return of zero and a standard deviation of about 1%. The …

important lenders' portfolio behavior can be in bringing about the adjustment of interest rates which Fisher's theory associates … with expected inflation. Given the importance of this adjustment for questions of both monetary theory and monetary policy …

these securities represent the only true long-run hedge against inflation risk. CPI-linked bonds make possible the creation … indexation of benefits in private pension plans. A firm could hedge the risk associated with a long-term indexed liability by …

also find that long-short positions in equities play a dominant role in the effective hedging of inflation risk over …

asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal …

: Economic risk is high relative to political risk, markets are sufficiently incomplete, and there exists a rent-less policy …