Showing 1 - 10 of 137
Persistent link: https://www.econbiz.de/10012522978
We examine asset prices in a representative-agent model of general equilibrium. Assuming only that individuals are risk averse, we determine conditions on the changes in asset risk that are both necessary and sufficient for the asset price to fall. We show that these conditions neither imply,...
Persistent link: https://www.econbiz.de/10011398103
Persistent link: https://www.econbiz.de/10012004921
Because of risk aversion, any sensible investment valuation system should value less Projects that contribute more to the aggregate risk, i.e., that have a larger income elasticity of net benefits. In theory, this is done by adjusting discount rates to consumption betas. But in reality, for...
Persistent link: https://www.econbiz.de/10012487747
Persistent link: https://www.econbiz.de/10012499150
Persistent link: https://www.econbiz.de/10013499030
Suppose that a group of agents having divergent expectations can share risks efficiently. We examine how this group should behave collectively to manage these risks. We show that the beliefs of the representative agent is in general a function of the group.s wealth level, or equivalently, that...
Persistent link: https://www.econbiz.de/10011507677
Persistent link: https://www.econbiz.de/10011709636
Persistent link: https://www.econbiz.de/10003471059
Persistent link: https://www.econbiz.de/10003428677