Even if you have a long time horizon, Brad Delong's advice to invest in stocks only makes sense if you are tolerant of … risk, according to Zvi Bodie. …

which the risk management and hedging needs of investors may be effectively met through the derivative instruments. However …

), nominal bonds, and stocks (the stock index). <p> The investor faces an incomplete market setting and is not able to perfectly … hedge <p> long run real interest rate risk using the available securities. The optimal invest- <p> ment strategy is … fraction of stocks in the <p> portfolio as time passes towards the investment horizon, and (ii) a higher bond to <p> stock …

is an offer not to be ignored. However, financial agents and managers must be aware that risk is a constant presence in …

Market makers have to continuously set bid and ask quotes for the stocks they have under consideration. Hence they face … indeed provide liquidity, is challenged by the price risk they bear due to their inventory. In this paper, we provide optimal …