higher risk-adjusted returns than riskier assets. Consuming the high risk-adjusted returns of safer assets requires leverage …, creating an opportunity for investors with the ability to apply leverage. Risk parity portfolios exploit this opportunity by … equalizing the risk allocation across asset classes, thus overweighting safer assets relative to their weight in the market …

risk premia, where carry strategies are commonly exposed to global recession, liquidity, and volatility risks, though none …

theaters and trades, why they run, what determines the risk, whether to return to the theater or trade when the dust settles …, and how much to pay for assets (or tickets) in light of this risk. These theoretical considerations shed light on the …