The twin problems of hedging and pricing of options in discrete-time markets are analyzed. We consider trading strategies consisting of one stock and one bond. The bond price rises deterministically over time while the stock price can change in several (more than two) ways at each instant of trading. Given such stock price movements, perfect hedging is not possible, and arbitrage arguments alon...

Stock market prediction is essential and of great interest because successful prediction of stock prices may promise smart benefits. These tasks are highly complicated and very difficult. Many researchers have made valiant attempts in data mining to devise an efficient system for stock market movement analysis. In this paper, we have developed an efficient approach to stock market prediction by...

ABSTRACT Using the dispersion in stock returns during financial crisis as a source of exogenous variation wealth Norwegian entrepreneurs who held listed stocks, I show that adverse shocks to business owners had large effects on their firms' financing, employment, and investment. The investment employment are driven by young firms, obtain differentially less bank financing following an owner sho...

In this paper, we undertake an extensive analysis of in-sample and out-of-sample tests of stock return predictability in an effort to better understand the nature of the empirical evidence on return predictability. We show that a number of financial variables appearing in the literature display both insample and out-of-sample predictive ability with respect to stock returns in annual data cover...