expectations. Classical financial markets under risk and no ambiguity are contained as special cases, including various forms of …

expectations. Classical financial markets under risk and no ambiguity are contained as special cases, including various forms of …

probabilistic model uncertainty. In particular, I prove the existence of a three-fold tradeoff between returns, risk, and ambiguity … supported by the incomplete diversifiability of ambiguity and the existence of a tradeoff between risk and ambiguity. The … sufficient conditions that let the approximation degenerates to the traditional Ross' arbitrage pricing theory are provided …