Shipping freight rates are notoriously volatile and shipping investors are perceived to be risk-loving. This paper explores the stochastic properties of freight rates in the shipping industry and derives the analytical equations for their moments in downside and upside markets using a two-piece...

The relationship between risk and expected returns has been investigated extensively in the financial economics literature. Theoretical models generally predict a positive relation between the two. Nevertheless, the empirical findings so far have been inconclusive. Using a generalization of the...