The use of options in altering the return distribution of stock portfolios has found increasing interest among investment managers. The potential of options in forming portfolio return distributions that are more consistent with investor preferences has been well developed, but determining the...

In physical models it is well understood that the aggregate behaviour of a system is not in one to one correspondence with the behaviour of the average individual element of that system. Yet, in many economic models the behaviour of aggregates is thought of as corresponding to that of an...