On 2003-12-05, john hull uttered: >For some reason, I can't get it straight in my head why the risk-free >rate of interest would be higher than zero.
The easiest example I know of is, would you be happy saving all of your income for the next year, without receiving a formidable compensation? That'd kill you, after all, because eating is consumption. This shows us that people have at least some urgent desires which aren't interchangeable with longer term ones. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2