New answers tagged asset-pricing
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Budget-feasible set in a portfolio choice problem
The agent owns nothing initially but the endowment. If their endowment would be $0$ in every state, then it should be clear that their initial wealth is zero, and they could only afford a portfolio ...
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In the context of Blanchard and Watson (1982), what is the difference between the bubble component, bubbles and bubble?
The bubble component refers to the deviation of the price of an asset from its fundamental value, that is, the value that would be expected based on economic fundamentals such as earnings or dividends....
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