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We develop a simple model of managing a system subject to pollution damage under risk of an abrupt and random jump in the damage coefficient. The model allows the full dynamic characterization of the optimal emission policies under uncertainty. The results, that imply prudent behavior due to...
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accuracy, excess return, and portfolio correlation with the index and the market. Performance is evaluated considering … empirical distributions of excess return, final wealth and correlations of the portfolio with the index and the market. The …
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