There is a growing consensus that fundamental financial theory based on the assumption that markets are complete is not sustainable when financial markets become increasingly complex. Traditional models fail to capture many of the stylized facts and biases identified by recent financial...

This paper studies the problem of hedging equity-linked life insurance contracts with efficient hedging technique in stochastic interest economy. In our setting, the payoff of life insurance contracts is based on two risky assets, where the return processes are driven by different correlated...