New Asset Pricing Theory Revolutionizes Investment Strategies for Financial Success
Asset Pricing Theory is a textbook that explains how prices of assets are determined in competitive markets. The book focuses on using advanced mathematical methods like geometric and martingale techniques to study how people make decisions about investing and consuming. One key finding is the use of recursive utility as a way to understand how people's preferences change over time. The book also provides exercises and mathematical appendixes to help readers deepen their understanding of these concepts.