Chabakauri, Georgy; Yuan, Kathy; Zachariadis, Konstantinos - London School of Economics (LSE) - 2014
different states of the economy. Uninformed investors attempt to extract that information from asset prices, but full revelation … factor. When the market is complete, we provide equilibrium asset prices and optimal portfolios of investors in closed form …. In incomplete markets, we derive prices and portfolios in terms of easily computable inverse functions. …