Assume that von Neumann?Morgenstern-utility is a time separable functional of the form Show that the price of
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Assume that von Neumann?Morgenstern-utility is a time separable functional of the form
Show that the price of an arbitrary security can be written as expectation value
where the random variable M is called the stochastic discount factor (SDF), and is given by
Transcribed Image Text:
U[C] =u(co) + e pT u(cw)Po Sn = E[Md,]-
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My name is Ajith. I have completed my graduation from Mahatma Gandhi University Kottayam and also completed certificate of computer application with two year experience.
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