Koushik Sekhar wrote:
>
> Should markets be priced assuming that nothing will go wrong ("random
> shocks") or should markets be priced assuming that something will go wrong ?
Neither, obviously. Prices should reflect expected values - in this
case, disasters discounted by their probabilities.
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]
"He wrote a letter, but did not post it because he felt that no one
would have understood what he wanted to say, and besides it was not
necessary that anyone but himself should understand it."
Leo Tolstoy, *The Cossacks*
