stochastic volatility of asset prices and to give theoretical arguments for empirically well documented facts. We show that … stochastic volatility. …

differences of opinion is left, and hence volatility is decreased. …

and the real-time prediction of professional forecasters. We find that optimism shocks - in line with theory - generate a …

framework is a bivariate volatility model, where volatility spillovers of either positive or negative sign are allowed for. Our … countries. Regarding the volatility spillovers, such spillovers from bond returns to those of stocks are stronger than the other … results show that by considering time-varying return and volatility spillovers when calculating the risk-minimising portfolio …

volatility. Hence, they are viable alternatives to the geometric Brownian motion. …