In the standard model for insurance demand, the risk is totally exogenous and the insurance premium is paid for out of riskless wealth. This model yields results that are mostly in contradiction to everyday observation and have been used to question the pertinence of expected utility theory on...

This article combines a portfolio model and the APT to determine common factors explaining the bias observed ex post between the forward exchange rate and the future spot rate of the same currency. The model allows us to decompose the forward exchange bias into four risk premiums connected to...