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Author Question: Under a consumption-based theory of the pricing of risky assets, uncertain returns on such an asset ... (Read 27 times)

cool

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on: Jul 1, 2018
Under a consumption-based theory of the pricing of risky assets, uncertain returns on such an asset should be discounted by a stochastic discount factor that takes into account:
 a. the mean and standard deviation of the uncertain return.
 b. whether the uncertain return has a normal distribution.
 c. both the nominal and real interest rates.
 d. the rate of time preference and present and future marginal utility of wealth.

Question 2

A potential problem arises in principal-agent relationships
 a. because the agents' actions are not completely observed by the principals
  b. because the principals' actions are not completely observed by the agents
  c. because the agent's and the principals' actions are completely observed by each other
  d. the observability of actions is irrelevant


epscape

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Reply #1 on: Jul 1, 2018
Answer to Question 1

d

Answer to Question 2

a


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cool

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Reply #2 on: Jul 1, 2018
Thank you :)


epscape

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Reply #3 on: Jul 1, 2018
Happy to help you


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